In the first half of July, China's imported cotton yarn market witnessed a broad uptick in foreign offers. Mills from Vietnam, Pakistan, India, Bangladesh, Indonesia, and Malaysia raised FOB, CNF, and CIF quotes across various counts, with C32S and above ring-spun, compact, and combed yarns seeing the largest increases, while lower-count open-end and coarse yarns adjusted more modestly.
This price rally is not driven by a single factor but by multiple converging forces. First, the rebound in ICE cotton futures in early July provided cost-side support. Second, textile and apparel exports from Vietnam, Pakistan, Bangladesh, and India all rebounded month-on-month in May and June, signaling improving downstream demand. Third, Indian domestic S-6 spot prices and CCI auction floor prices have risen sharply, further pushing up raw material costs for mills.
Regional Divergence: Why Vietnam Yarn Outperforms
Amid the overall uptrend, yarns from different origins showed clear divergence. Traders and weaving mills in Jiangsu, Zhejiang, Guangdong, and Fujian reported that inquiries and sales for Vietnamese yarn in early-to-mid July were significantly better than those for Indian, Pakistani, and Uzbek yarn.
The root cause lies in Vietnamese mills' more restrained pricing strategy. Compared to their Indian and Pakistani counterparts, Vietnamese mills delayed their price adjustments and kept increases smaller. This allowed C40S and below Vietnamese yarn to maintain strong cost competitiveness, attracting significant buying interest from Chinese buyers.
Meanwhile, geopolitical risks emerged as a key market variable. The breakdown of US-Iran peace talks and repeated strikes near the Strait of Hormuz have led to a sharp rise in crude oil, energy, and chemical prices, while ocean freight rates have resumed an upward trajectory. Indian, Bangladeshi, and Malaysian mills had to raise their CNF and CIF quotes accordingly to offset rising raw material, production, and transportation costs. In contrast, Vietnamese yarn benefited from road and rail transport advantages, cementing its cost edge.
Port Inventories: Reduced Arrivals and Rush Exports
On the inventory front, arrivals of Uzbek cotton yarn, Pakistani siro-spun yarn, Taiwanese open-end yarn, and T/C yarn from Indonesia and Vietnam have weakened over the past two weeks. Meanwhile, some coastal textile and garment enterprises are engaged in short-term "rush exports," accelerating the drawdown of port stocks.
This combination of reduced supply and faster demand has led to a steady decline in Chinese port inventories. Lower stocks provide price support for imported yarn but also suggest that the window for replenishment may be narrowing, especially for Vietnamese yarn varieties with relatively smaller price increases, which could face faster depletion.
Implications for Buyers and Foreign Trade Firms
The current divergence in the imported yarn market requires buyers and foreign trade firms to reassess their procurement strategies and risk exposure.