The cotton textile industry is undergoing a structural adjustment phase. Raw material prices are diverging, downstream procurement is shifting from active stockpiling to passive just-in-time buying. Data from the 128th survey by the China Cotton Textile Association shows that this off-season is not a full-scale recession but a search for a new equilibrium between price and demand across the supply chain.
Raw Material Markets: Divergence Amid Bull-Bear Dynamics
Cotton prices are oscillating within a range. High temperatures in some Xinjiang production areas have introduced uncertainty into yield expectations, triggering short-term weather speculation. However, the industry consensus is that it is too early to assess the actual impact. Downstream demand remains lackluster, lacking the fundamental support needed to drive sustained Zhengzhou cotton futures upward.
Polyester staple fiber has taken a different trajectory. Escalating geopolitical tensions around the Strait of Hormuz have driven crude oil prices sharply higher, pushing polyester staple fiber prices back above 7,000 yuan per ton. This rally is cost-driven rather than demand-driven. Future price movements will hinge on developments in the US-Iran situation, significantly increasing raw material cost uncertainty for buyers.
Viscose staple fiber prices remain relatively firm, with the market in a sideways consolidation pattern. Downstream consumption is stable, circulation is smooth, and traders and mills maintain synchronized inventory levels without notable bullish or bearish sentiment. This stability is rare in the current divergent landscape.
Yarn Markets: Margin Pressure and Order Structure Shifts
Pure cotton yarn continues its off-season pattern. Prices are broadly stable, but some mills have offered discounts of 100-300 yuan per ton to reduce inventory. Crucially, cotton prices have risen rapidly while yarn prices have struggled to follow, compressing spinning margins. This scissors effect means cotton mills face dual pressure from rising costs and weak selling prices.
Vortex-spun yarn markets are relatively stable. Viscose and polyester-viscose blended yarns maintain steady sales, while polyester yarn prices are largely unchanged. The industry pins hopes on autumn/winter orders to drive a demand recovery.
Color-spun yarn shows clear structural divergence. Multi-component and high-count differentiated varieties maintain stable demand, while conventional grades face heavy destocking pressure. Weak end-order demand leads to cautious attitudes, with companies adopting small-order, quick-response models and avoiding large-scale replenishment.
Differentiated yarn mills maintain full capacity utilization, but the off-season atmosphere is thick. Order continuity is poor, and large-volume shipments are lacking. With raw material price volatility increasing, yarn products are priced on a case-by-case basis. Inventory levels remain reasonable, but market outlook is cautious.
Polyester yarn prices are stable, but downstream buyers purchase only as needed, with weak overall buying interest. Mill operating rates are unchanged from earlier periods, but orders are below expectations, and inventories are gradually increasing.
Viscose yarn markets are quiet. Mills maintain high operating rates, but new orders are insufficient. Some machines have shifted to conventional varieties, and industry inventories have risen slightly. With stable raw material prices, viscose yarn prices are unlikely to fluctuate sharply, but market conditions are unlikely to improve in the short term.
Fabric Markets: Low Volume, Low Demand Become the Norm
Grey fabric markets are slowing. Orders are insufficient, mills operate at low capacity utilization, and inventories are rising. The industry expects discount selling of conventional grey fabrics to reduce capital tied up in inventory. Raw material procurement is also slowing as mills focus on cost control. The market will continue to see low transaction volumes and low demand, with prices fluctuating at low levels.
Yarn-dyed fabric markets are slowing overall. Operating rates are normal, but forward orders are clearly insufficient. End customers are weak and cautious in placing orders. Weaving mills show little willingness to stock up, buying only for immediate needs. Fabric prices are relatively stable, but operating pressure is high, and margins are squeezed to low levels.
Denim markets have also entered the off-season. In early July, 10-needle open-end cotton yarn for denim traded in a narrow range of 14,550-14,680 yuan per ton. Domestic and export demand remains weak. Orders are contracting, mill operating rates are declining, and companies are accelerating destocking. June textile trade data was weak, and a strengthening US dollar has increased overseas procurement costs, hindering export order recovery. The industry is in a wait-and-see mode.