The cotton textile market is experiencing a "fire and ice" scenario on the raw material front. The 128th survey by the China Cotton Textile Association reveals divergent trends: cotton prices fluctuate within a range, while polyester staple fiber rebounds sharply due to geopolitical risks, and viscose staple fiber remains stable. This divergence is reshaping downstream procurement strategies and inventory management.
Raw Material Divergence: Weather Speculation and Geopolitical Risks
The cotton market is caught between multiple factors. High temperatures in some Xinjiang fields create uncertainty over yields, sparking weather speculation, but the industry believes the actual impact on production still needs further observation. The downstream is in the traditional off-season, and while essential demand exists, fundamentals are insufficient to support a sustained price rally, with Zhengzhou cotton futures trading in a range.
The polyester staple fiber rebound is more dramatic. Crude oil surged due to renewed geopolitical tensions, with concerns over a potential closure of the Strait of Hormuz pushing the staple fiber main contract back above 7,000 yuan per ton. Future trends will depend heavily on US-Iran developments, meaning cost support for polyester yarn may fluctuate at any time.
The viscose staple fiber market remains relatively calm, with firm prices and smooth circulation. Traders and factories are in sync, with no significant bullish or bearish sentiment. This stability acts as a "ballast stone" for viscose-containing yarn prices.
Yarn Market: Inventory Reduction Becomes the Theme, Profit Margins Squeezed
Pure cotton yarn continues its off-season pattern, with prices generally stable. However, some mills have offered discounts of 100-300 yuan per ton to reduce inventory pressure. As cotton prices have risen rapidly while yarn prices struggle to follow, real-time spinning profits have been significantly reduced. If cotton prices remain high, mills will face greater difficulty in passing on costs.
Vortex-spun yarn and colored spun yarn show differentiated characteristics. Vortex-spun viscose yarn maintains stable volumes and prices, with autumn/winter orders seen as a key driver. In colored spun yarn, multi-component and high-count differentiated varieties see relatively stable demand, while conventional varieties face heavy destocking pressure. Insufficient end-user orders lead to a market dominated by "small orders and quick turns," with no large-scale inventory replenishment.
Differentiated yarn mills maintain full capacity utilization, but order continuity is poor, lacking large batch shipments. Raw material price volatility forces a "one-order, one-price" approach, and while inventories remain reasonable, market sentiment is cautious.
Polyester yarn and viscose yarn markets face different pressures. Polyester yarn prices are broadly stable, but downstream buyers purchase only as needed, with weak procurement willingness. Orders fall short of expectations, and inventories gradually increase. The viscose yarn market sees dull trading, insufficient new orders, and a slight rise in industry inventories.
Fabric Market: Grey Fabric Faces Risk of Price Dumping
The grey fabric market sees slower production and sales, with insufficient downstream orders. Mills operate at low capacity, mainly producing conventional varieties. Due to weak demand, conventional grey fabrics may face price dumping to reduce capital occupation, further suppressing upstream yarn procurement.
The yarn-dyed fabric market is slowing overall, with a clear lack of follow-up orders. End customers are cautious in placing orders, and weaving mills show little willingness to stock up. Fabric prices remain relatively stable, but profit margins have been squeezed to very low levels.
The denim market is also under pressure. In early July, 10-ne open-end cotton yarn for denim traded in a narrow range of 14,550-14,680 yuan per ton. June textile import and export data were weak, and the strengthening US dollar increased overseas procurement costs, hindering the recovery of export orders.