The cotton textile industry is undergoing a classic deepening off-season. The 127th survey by the China Cotton Textile Association shows that from raw materials to fabrics, the entire supply chain feels the pressure from weakening end demand. Cotton prices rose then fell, polyester staple fiber dropped sharply due to plunging crude oil, and only viscose staple fiber bucked the trend on tight supply. This divergence at the raw material level is accelerating downstream to yarn and fabric segments.
Raw Material Divergence: Three Different Paths
Cotton markets were driven by macro sentiment. The US-Iran agreement briefly boosted global grain and financial markets, pushing Zhengzhou cotton futures to 16,140 yuan/ton. But as speculative enthusiasm cooled and downstream cotton yarn remained in the traditional off-season, prices quickly fell to 15,615 yuan/ton. Public data indicates that cotton prices are now in a range-bound pattern, lacking fundamental drivers.
Polyester staple fiber's decline is more straightforward. The Strait of Hormuz shipping volume has recovered to nearly 60% of pre-conflict levels, crude oil prices continue to fall, and geopolitical premiums have been largely erased. After the cost side squeezed out risk premiums, the polyester chain began a catch-up decline, with staple fiber futures falling to around 6,900 yuan/ton. For polyester-blended yarn makers, this raw material drop means weaker support for finished product prices and rising inventory depreciation risks.
Viscose staple fiber is the only relatively strong raw material. Factory rebate incentives have been reduced, traders are raising prices due to tight supply, and the tight delivery situation will persist in the short term. However, downstream viscose yarn sales pressure has not eased, and prices are actually weakening—meaning that raw material price increases are not being passed through, and viscose yarn producers' margins are being squeezed from both sides.
Yarn Markets: Inventory Clearing Takes Center Stage
Pure cotton yarn markets continue their off-season pattern. Spinners' quoted prices are broadly stable, but trade-level discounting is widespread, keeping actual transaction prices low. Finished product inventories are slowly building, downstream weaving operating rates are declining, grey fabric stocks are rising, and autumn/winter orders have not yet materialized in volume. Companies remain cautious, with little willingness to build raw material inventories.
Vortex-spun yarn, colored yarn, and differential yarn segments all feel the off-season chill. Vortex-spun viscose and polyester-viscose yarns are weak in both volume and price, with mills relying on small orders to maintain production balance. Colored yarn conventional varieties face heavy inventory pressure, with only high-count differentiated products showing relatively stable demand. Differential yarn mills operate at full capacity, but order continuity is poor, with small and scattered orders squeezing margins.
Polyester-blended yarns face particularly acute pressure. After the sharp drop in polyester staple fiber, yarn prices followed, and combined with the off-season, spot trading has further weakened. Orders are insufficient, and product inventories continue to rise. Prices for polyester-blended yarns have not yet stabilized, and downstream buyers are purchasing only for immediate needs, with market sentiment highly cautious.
Fabric Markets: Operating Rates Decline, Export Uncertainty Rises
The pure cotton grey fabric market is stable but weak, with slower shipments, small quick-response orders, scarce new orders, and rising finished product inventories. Weaving mills are purchasing raw materials only as needed, with little stocking intent. The yarn-dyed fabric market is also slowing, with raw cotton prices down about 300 yuan/ton and high-count pure cotton yarn prices down about 180 yuan/ton. Fabric product prices are loosening locally, and profit margins are extremely thin.
Denim fabric pressure is even more representative. The ex-factory price of 10s pure cotton OE yarn remains range-bound around 14,600 yuan/ton. Both domestic and export markets are quiet, orders are shrinking, factory operating rates are declining, and companies are rushing to destock. Adding to industry concern, the US dollar index continues to strengthen, increasing export environment uncertainty. Companies are closely tracking export trends to assess the outlook.