At the close of morning trading on July 17, 2026, the main cotton futures contract settled at 15,770 yuan per ton, down 2.14%—the first time in three months it has broken below the key support level of 15,800 yuan. Market sentiment has turned noticeably cautious.
Price Transmission Chain Under Pressure
Cotton yarn, the immediate downstream product, also weakened, closing at 22,235 yuan per ton, down 1.55%. Staple fiber, PTA, and bottle-grade chips all fell as well, by 0.22%, 0.28%, and 0.70% respectively. From an industry chain perspective, the sharp drop in cotton—an upstream raw material—first squeezes the profit margins of spinning mills. The smaller decline in cotton yarn compared to cotton suggests that downstream weavers and garment factories are adopting a wait-and-see attitude, intensifying price pressure.
The broad weakness across chemical fiber varieties indicates that this is not a single-commodity issue but a systemic response to lackluster end-consumer apparel demand. Although the declines in PTA and staple fiber were smaller, their alignment with cotton signals a general demand ceiling for textile raw materials.
Inventory Pressure Accelerating in Industrial Clusters
In Xinjiang, the main cotton-growing region, the crop is in a critical growth phase, and weather has not yet posed a material threat to output. What truly weighs on the market is the operating rate data from downstream weaving clusters. In major fabric and home textile hubs such as Shengze, Nantong, and Keqiao, loom utilization rates began to decline month-on-month in late June, and the traditional July off-season has exacerbated this trend.
On the inventory front, finished yarn inventory days at spinning mills have climbed above 25 days, higher than the same period last year. This overhang forces mills to reduce raw material purchases, which is reflected in the futures market as waning long interest and growing short power. The cotton futures break below 15,800 yuan is effectively a confirmation of a “price without volume” situation in the spot market.
Practical Implications for Buyers and Exporters
For buyers with immediate needs, the current futures decline may open a favorable pricing window. However, caution is warranted: spot market adjustments often lag, and quality premiums for different cotton grades may widen. For exporters, the interplay between exchange rates and overseas orders is critical—if the renminbi weakens in tandem, it could partially offset the cost advantage from lower domestic raw material prices.