The latest national survey of major cotton textile markets by the China Cotton Textile Association indicates that the industry is entering a typical 'deepening off-season' phase. From raw materials to fabrics, all links in the chain are under pressure from shrinking orders and rising inventory, with companies generally cautious about the future.
Raw Materials: Cost-Driven Divergence and Intensified Volatility
The cotton market recently experienced a rally followed by a decline. Boosted by macro factors such as the US-Iran agreement, external cotton prices once drove the domestic Zhengzhou Cotton Futures main contract to 16,140 yuan/ton. However, as macro sentiment faded and downstream demand weakened, prices quickly fell back to around 15,615 yuan/ton. Industry data shows that current cotton prices are in a dilemma, with limited market drivers, and are expected to continue range-bound volatility in the future. For textile companies, this means more flexible raw material procurement strategies are needed to avoid inventory risks from price fluctuations.
The polyester staple fiber market is facing deep pressure from the cost side. With the recovery of shipping volume in the Strait of Hormuz and the unwinding of geopolitical risk premiums, international oil prices have continued to fall, triggering a catch-up decline in the polyester chain. Futures prices for staple fiber have fallen to around 6,900 yuan/ton. This price movement has directly transmitted to the yarn sector, dragging down prices of polyester-containing yarns and further intensifying market wait-and-see sentiment.
In contrast, the viscose staple fiber market shows a stable-to-firm trend due to tight supply. Factory rebate incentives have been reduced, trader prices have risen, and tight delivery conditions are unlikely to change in the short term. However, downstream yarn sales pressure also exists, so viscose fiber prices are expected to remain largely stable.
Yarn and Fabric: Order Shrinkage, Destocking Becomes the Main Theme
The yarn market is generally under pressure across categories. The pure cotton yarn market continues its off-season pattern, with prices stable overall, but trade concessions are common, keeping actual transaction prices low. Spinning mills' finished product inventories are still slowly accumulating, downstream weaving operating rates are declining, and autumn/winter orders have not yet materialized. Categories like vortex-spun yarn, color-spun yarn, and differentiated yarn all report insufficient new orders, mainly small and scattered, with significant destocking pressure on conventional varieties. Polyester and viscose yarns also face price weakness and slow transactions.
The fabric market is no more optimistic. Full cotton grey fabric shipments are slowing, with few new orders and rising finished product inventories, increasing pressure on weaving mills. The yarn-dyed fabric market sees mostly small orders, with raw cotton prices down about 300 yuan/ton, and yarn prices difficult to support, especially high-count pure cotton yarn which has fallen about 180 yuan/ton, squeezing fabric product margins. The denim market is sluggish both domestically and internationally, with lower factory operating rates and accelerated destocking.
Foreign Trade Environment: USD Strength Adds Uncertainty
Notably, the continued strength of the US dollar index poses new challenges to the textile export environment. Export-oriented categories like denim are already feeling the pressure, with companies closely monitoring export trends. This reminds us that alongside weak domestic demand, uncertainties in external demand are also rising, requiring foreign trade companies to manage exchange rate risks and diversify markets.