June 2026 data from the cotton textile industry reveals the deep impact of the off-season: pure cotton yarn output fell 1.5% month-on-month, pure cotton fabric output dropped 3.2%, and the yarn sales rate was only 71%, down another 1 percentage point. These numbers reflect the pressure across the entire supply chain from persistently weak terminal demand, with small and medium-sized mills facing survival challenges.
Event Background
In June, the cotton textile industry entered a traditional off-season, with weakening demand for apparel and home textiles and low willingness for downstream stocking. Although pure cotton yarn output grew 0.7% year-on-year, it fell 1.5% month-on-month, indicating a clear slowdown in production. The combined share of blended and chemical fiber yarns rose to 49.4%, up 0.5 percentage points month-on-month, reflecting companies adjusting product mixes under cost pressure.
Small and medium-sized mills have been hit hardest. Inventory buildup and margin compression have led to increased production cuts and shutdowns, while large backbone mills barely maintain essential production. This divergence suggests further industry concentration, squeezing the survival space for smaller players.
Industry Impact
The limited upward momentum in cotton yarn prices is a key market feature. Domestic 32-count pure cotton yarn averaged 23,336 yuan/ton in June, up only 59 yuan/ton or 0.25% month-on-month. In contrast, imported 32-count pure cotton yarn averaged 22,843 yuan/ton, down 112 yuan/ton or 0.49%. The improved cost-effectiveness of imported yarn continues to pressure domestic yarn, forcing mills to offer discounts.
The pace of finished goods inventory buildup is alarming. By end-June, yarn inventories reached 23.1 days, up 6.3 days from the previous month; fabric inventories stood at 31.7 days, up 4 days. This means even if production stopped immediately, existing stocks would take nearly a month to clear. Price reductions to recover cash have become the norm, further squeezing margins.
In raw material procurement, companies focused on essential replenishment. The main Zhengzhou Cotton Exchange contract fell to around 15,600 yuan/ton twice, triggering concentrated buying. By end-June, cotton industrial inventories stood at 868,000 tons, up 21,000 tons month-on-month. In the cotton mix, Xinjiang cotton accounted for 79.1%, up 5 percentage points month-on-month but down 10 percentage points year-on-year; imported cotton accounted for 14.5%, down 4.9 percentage points month-on-month but up 9.8 percentage points year-on-year, reflecting a shift toward greater import reliance.
On exports, June textile and apparel exports reached $29.271 billion, up 7.2% year-on-year and 14.3% month-on-month, showing a temporary recovery. However, first-half apparel exports still fell 0.7% year-on-year, indicating limited external support unable to reverse the weak domestic off-season trend.