The imported cotton yarn market is experiencing a rare stalemate. Despite ICE cotton futures climbing back above 80 cents/lb in early July and Southeast Asian textile & apparel exports showing month-on-month growth in May-June, FOB/CNF/CIF offers for cotton yarn have largely stabilized, with some second- and third-tier Indian, Vietnamese, and Indonesian "futures yarn" prices even slightly declining. This anomaly of rising costs without rising yarn prices highlights a deep tug-of-war across the supply chain.
Cost and Demand Diverge
On the cost side, Indian S-6 spot prices first fell then rose over the past week, while CCI's reserve floor prices first stabilized then adjusted. Raw material costs for mills have not fluctuated significantly. ICE's sustained rally has actually narrowed the premium of Indian cotton over international prices, prompting mills to favor domestic high-grade 2025/26 cotton. As a result, Indian branded and large mills have no plans to adjust July-September shipment offers.
Demand, however, has not kept pace. Traders and weaving mills in Jiangsu, Zhejiang, Guangdong, and Fujian report that inquiries and actual purchases have not picked up significantly. While coastal mills and intermediaries showed slightly more interest than in mid-to-late June, overall sentiment remains cautious. This means mills dare not pass on cost pressure downstream for fear of losing already limited orders.
Regional Divergence: Pakistan vs. Vietnam
Pakistan's market presents a different picture. With domestic cotton prices rising steadily (2026/27 season arrivals increasing, mills buying actively), exports to China, Bangladesh, and Vietnam have been "mediocre," leaving local mills and traders in a wait-and-see mode.
A notable concern: since late June, Pakistan's import demand for cotton has been persistently low, with yarn production relying more on domestic cotton. Domestic cotton's fiber length, strength, and other parameters may differ from imported cotton, potentially weakening key yarn quality indicators like strength, CV%, and stability. For Chinese weaving mills relying on Pakistan yarn for mid-to-low-end blends, this calls for stricter quality checks before ordering.
Vietnamese large mills face a dilemma. With ICE back above 80 cents/lb, some feel justified in raising offers for C32S and above combed ring-spun and high-count OE yarns. However, volatile cotton futures and competitors in India and Pakistan holding steady make them reluctant to move first, fearing customer loss. This hesitation is rippling from Chinese buyers to upstream mills.
Polyester-Cotton Yarn Becomes the Price Low
Sharp drops in crude oil, PTA, and polyester staple fiber have led to relatively larger declines in Vietnamese and Indonesian polyester-cotton yarn offers. This makes polyester-cotton yarn a "price low" among imported yarns, attracting cost-conscious coastal weaving mills and boosting inquiries and purchases compared to mid-to-late June.
But caution is warranted: chemical fiber raw material prices are volatile, and cost support for polyester-cotton yarn is unstable. If polyester staple fiber continues to fall, further price cuts are possible, and the "bottom-fishing" opportunity may not yet be ripe.