The off-season effect in the cotton textile industry is clearly reflected in the latest large-scale survey conducted by the China Cotton Textile Association. The 128th survey covered the entire chain from raw materials to fabrics, with the core signal being: rigid demand persists, but it is insufficient to drive prices upward; raw material prices show significant divergence; companies generally reduce inventories and shorten procurement cycles, maintaining a wait-and-see attitude.
Raw Material Divergence: Cotton Fluctuates, Polyester Rebounds, Viscose Stable
The cotton market is currently in a tug-of-war between bullish and bearish factors. High temperatures in some Xinjiang plots have introduced uncertainty into production expectations, sparking short-term weather speculation, but the industry generally believes it is too early to assess the impact. Amid the off-season downstream, domestic cotton demand exists but cannot support sustained price increases for Zhengzhou cotton futures, which are trading in a range-bound pattern. This means that cotton textile enterprises face limited room for raw material cost reduction in the short term, further squeezing spinning margins.
Polyester staple fiber's trend is more driven by external variables. Crude oil prices surged due to escalating geopolitical tensions, with increased concerns over a potential closure of the Strait of Hormuz, pushing polyester staple fiber prices to rebound, with the main contract returning above 7,000 yuan per ton. This change directly impacts procurement decisions for polyester-blended yarn enterprises—raw material costs are expected to rise, but downstream orders have not picked up, leaving companies in a dilemma of rising input costs and stable yarn prices.
Viscose staple fiber is the most stable of the three major raw materials. Market prices remain flat, downstream consumption is stable, and traders are in sync with factories, with no significant bullish or bearish sentiment. This stability itself reflects a lack of incremental demand, with the entire chain waiting for clearer signals.
Yarn Market: Inventory Pressure and Product Differentiation
Pure cotton yarn enterprises are experiencing profit compression. Cotton prices have risen rapidly recently, but yarn prices struggle to follow, forcing some companies to cut prices by 100 to 300 yuan per ton to relieve inventory pressure. Real-time spinning profits are squeezed, and the off-season is expected to persist, leading to cautious market sentiment.
Vortex-spun yarn and colored yarn show clear product differentiation. Vortex-spun viscose yarn maintains stable volume and price, while polyester-viscose blended yarn sales are steady. Autumn and winter orders are highly anticipated, potentially boosting demand. In colored yarn, multi-component and high-count differentiated products have relatively stable demand, but conventional varieties face significant destocking pressure. Insufficient end-user orders mean the market is dominated by small orders and quick turns, with no large-scale restocking.
Differentiated yarn companies maintain full production capacity, but order continuity is poor, lacking large-volume bulk shipments. Volatile raw material prices lead to a quote-per-order model, with companies keeping inventory at reasonable levels. Polyester yarn and viscose yarn face similar challenges: downstream buyers purchase on a need-to-use basis, procurement willingness is weak, orders fall short of expectations, and inventories gradually rise.
Fabric Market: Order Contraction and Lower Operating Rates
Grey fabric production and sales continue to slow, with insufficient downstream orders. Factories maintain production with conventional varieties, operating rates remain low, and inventories increase. The industry generally expects that conventional grey fabrics may see price reductions to free up capital. Raw material procurement also slows, as companies focus on reducing operating costs.
The yarn-dyed fabric market is generally slowing, with clearly insufficient follow-up orders. End-user demand is weak, and orders are placed cautiously. Most weaving companies are not keen on building inventories, maintaining only essential procurement. Fabric prices are relatively stable, but profit margins are low, and operations remain under pressure.
The denim fabric market is squeezed by weak demand both domestically and internationally. In early July, the price of 10 Ne cotton OE yarn for denim fluctuated narrowly between 14,550 and 14,680 yuan per ton. June textile import and export data showed weak performance, and the strengthening US dollar increased overseas procurement costs, hindering export order recovery. The industry is in a wait-and-see mode, awaiting improvements in downstream demand.