Over the past year, the price of cotton yarn 21S has climbed from a low of 21,866.67 yuan/ton to a high of 23,466.67 yuan/ton, an increase of more than 7%. The current quote of 23,333.33 yuan/ton is hovering near the ceiling. With daily price changes staying flat since July, the curve has become almost horizontal.
This high-level stagnation typically signals a tug-of-war: upstream raw material suppliers refuse to lower prices, while downstream buyers are unwilling to chase highs.
Between Cost and Demand
The price anchor for cotton yarn 21S lies in cotton. Over the past year, the domestic cotton market has undergone a cycle from reduced harvest expectations to inventory digestion. The price center of 3128B grade cotton moved upward, directly pushing up spinning costs. Mills had to accept high raw material prices, leaving little room to lower finished product pricing.
But downstream demand has not absorbed the increase. End-consumer apparel spending in the first half of 2026 showed a pattern of stable volumes but falling prices. Brand owners adopted conservative procurement strategies for grey fabrics and yarns, preferring just-in-time buying over building inventories. This de-stocking mentality is visible in the price trajectory: after a rapid rise early in the year, prices have oscillated narrowly between 23,000 and 23,400 yuan/ton since Q2, lacking directional breakout.
The annual price distribution shows the current level is in the high range but not extreme. The median of 22,666.67 yuan/ton means half of the time prices were below this level. The current price is about 2.9% above the median, indicating a mildly bullish sentiment but lacking conviction.
Transmission and Divergence in Industrial Clusters
Cotton yarn 21S mainly flows into weaving for conventional grey fabrics. In clusters like Shengze and Nantong, weaving mills report operating rates around 70%, but new orders are mostly short-term and small-lot. The procurement cycle for yarn has shortened from two weeks to just three to seven days.
This behavioral shift directly weakens spinners' bargaining power. Although spinners try to pass on cost pressures downstream, acceptance is limited. Yarn traders act as a buffer but face growing inventory turnover pressure. Some report transaction volumes for 21S down about 15% year-on-year, with margins squeezed near breakeven.
Notably, the price gap between Xinjiang cotton and non-Xinjiang cotton is narrowing. As domestic cotton supply structure shifts, the cost composition of cotton yarn 21S is undergoing implicit adjustments that will gradually reflect in pricing in the second half of the year.
Where Is the Price Anchor?
The annual statistics show a peak-to-current gap of only -133.34 yuan/ton, meaning the price is less than 0.6% below the top. Meanwhile, the gap to the bottom is 1,466.66 yuan, indicating far more downside than upside. This asymmetric risk structure is unfavorable for bulls.
Over the next three months, market focus will center on three factors:
- Pre-new-crop supply expectations. Normal weather in major producing areas could ease raw material tightness and loosen yarn prices.
- The pace of autumn/winter orders. September is typically a restocking season for the domestic market; if orders materialize, they will provide substantive support for yarn prices.
- Exchange rate fluctuations in export markets. A trend change in the RMB exchange rate would directly affect textile export competitiveness and, in turn, yarn prices.