The off-season effect in the cotton textile industry is accelerating. The latest survey from the China Cotton Textile Association shows that cotton prices briefly surged before retreating, polyester staple fiber prices dropped due to falling raw material costs, while viscose staple fiber showed a divergent trend due to tight supply. However, whether in raw materials, yarns, or fabrics, the common conclusion is clear: weakening end demand, rising finished goods inventories, and enterprises entering a new destocking cycle.
Raw Material Markets: Divergent Cost Support, Range-Bound Trading
Cotton experienced a complete cycle of speculative rally and sentiment fade. Driven by macro factors including the US-Iran agreement, overseas cotton prices pushed the Zheng cotton main contract to a high of 16,140 yuan/ton. However, with the cotton yarn market in its traditional off-season and lacking fundamental drivers, speculative enthusiasm cooled, and prices quickly fell to 15,615 yuan/ton. This 'difficult to rise, difficult to fall' pattern suggests cotton will trade in a range, lacking both upward breakout momentum and deep downside risk.
Polyester staple fiber's decline is more straightforward. The Strait of Hormuz shipping volume recovered to nearly 60% of pre-conflict levels, geopolitical premiums unwound, and oil prices fell sharply. After cost-side risk was squeezed out, the polyester chain began a catch-up decline, with short-fiber futures falling to around 6,900 yuan/ton. For downstream buyers, this means cost support for polyester-blended yarns is weakening, and prices still have room to fall.
Viscose staple fiber is the only bright spot. Factory rebates have been reduced, traders face tight supply pushing prices up, and the tight delivery situation is unlikely to ease in the short term. However, downstream viscose yarn sales remain under pressure, with prices unable to follow the raw material rise. This 'upstream strong, downstream weak' scissors gap is squeezing viscose yarn producers' margins.
Yarn Markets: Fragmented Orders, Slowly Rising Inventories
The pure cotton yarn market continues its off-season pattern. Mill prices are broadly stable, but trader concessions are common, with actual transaction prices hovering at low levels. Finished goods inventories are slowly accumulating, downstream weaving mill utilization rates are falling, grey fabric inventories are high, and autumn/winter orders have not yet materialized. For buyers, this is a clear buyer's market, but caution is needed to avoid price cascades from distressed inventory sales.
Vortex-spun yarn and color-spun yarn show even more pronounced off-season characteristics. Vortex-spun viscose and polyester-viscose yarns are weak in both price and volume, with mills operating on small orders and barely balancing production and sales. For color-spun yarn, high-count differentiated varieties maintain relatively stable demand, but conventional varieties face heavy destocking pressure, with end orders scarce and a strong wait-and-see sentiment.
Differentiated yarn mills maintain full capacity utilization, but order continuity is poor, with new orders mainly small and scattered. The off-season combined with price competition is further compressing profits. Enterprises generally hold a 'cautiously optimistic' view—optimistic about structural demand for differentiated products, but cautious about the overall deteriorating market environment.
Polyester yarn and viscose yarn further confirm the poor transmission along the supply chain. Polyester yarn prices have fallen sharply following raw material declines, with downstream buyers purchasing only on a need basis. Orders are insufficient, and inventories are under pressure. Viscose yarn faces the awkward situation of rising raw material costs but falling yarn prices. Transaction speeds are slow, new orders are scarce, and the market is expected to remain stable.
Fabric Markets: Shrinking Orders, Thin Margins
The grey cloth market is weak, with slower shipment pace, orders mainly small and fast-reacting, and finished goods inventories accumulating. Weaving mills face rising operational pressure. Raw material purchases are strictly need-based, with minimal stockpiling willingness. This 'zero inventory' mindset itself reflects deep market pessimism.
The yarn-dyed fabric market is similarly slowing. Raw cotton prices have recently dropped by about 300 yuan/ton, but cotton yarn prices are difficult to hold, with high-count pure cotton yarn prices falling by about 180 yuan/ton. Due to weak downstream demand, most enterprises buy on a need basis, fabric product prices have eased locally, and profit margins are thin. Companies are cautious about the future, and market confidence needs a boost.
The denim market is cold in both domestic and export channels. Downstream orders are shrinking, factory utilization rates are falling, finished goods shipments are sluggish, and all companies are accelerating destocking. The strengthening US dollar index adds uncertainty to the export environment, and industry players are closely monitoring export trends to assess future market direction.