The imported cotton yarn market saw a broad price surge in mid-July. Vietnam, India, Pakistan, Bangladesh, and Indonesia all raised their FOB, CNF, and CIF offers, with C32S and above ring-spun, compact, and combed yarns seeing the steepest hikes. Low-count open-end and coarse yarns adjusted more moderately. This rally is not driven by a single factor but the concentrated release of multiple pressures.
The Logic Behind the Rally: Dual Pressure from Cotton Costs and Freight
First, cost-side pressure cascaded from upstream. The ICE cotton rebound in early July, together with consecutive hikes in India's S-6 spot and CCI auction floor prices, directly pushed up Indian mills' production costs. Mills in Pakistan and Bangladesh faced similar raw material pressure and had to raise offers accordingly. Second, geopolitical tensions aggravated freight uncertainty. The collapse of US-Iran peace talks disrupted the Strait of Hormuz, driving up crude, energy, and chemical prices, and sea freight rebounded sharply. Mills in India, Bangladesh, and Malaysia had to raise CNF/CIF prices to cover the triple squeeze of raw materials, production, and transportation.
Vietnam Yarn: Slower Price Hikes, Faster Shipments
Vietnam yarn behaved differently in this rally. According to a major Shaoxing textile trading company, Vietnam yarn inquiries and shipments outperformed Indian, Pakistani, and Uzbek yarn in early to mid-July. Two reasons: first, Vietnam mills adjusted their offers later and less aggressively than other Southeast Asian mills, maintaining a strong cost-performance edge for C40S and below; second, Vietnam's advantage in road and rail transport mitigated the impact of surging sea freight, offering better cost control. As buyers sought relatively cheaper options, Vietnam yarn became a near-term substitute of choice.
Port Inventories: Reduced Arrivals and Rush Exports Converge
Coinciding with the price surge, port inventories of cotton yarn continued to decline. Survey data show that arrivals of Uzbek yarn, Pakistani siro yarn, Taiwan open-end yarn, and Indonesian/Vietnamese T/C yarn all weakened in the past half-month. Meanwhile, some coastal textile and garment enterprises engaged in short-term rush exports, further accelerating destocking. This means that despite rising overseas offers, the domestic market faces a tight supply situation in the near term, with potential spot shortages for certain specifications.
Industry Impact: Mills Under Pressure, Tug-of-War Intensifies
For downstream fabric mills, higher overseas prices and falling port inventories mean a passive rise in procurement costs. However, price transmission to end garment orders lags, and fabric mills generally have limited tolerance for high-priced yarn. This may lead to a period of "sellers holding firm, buyers watching." In actual transactions, offers from Indian second- and third-tier mills have already dropped significantly compared to June, indicating that some buyers have shifted to more cost-effective alternatives.