Since early July, coastal yarn markets in China have experienced a concentrated uptick in overseas offers. Cotton yarn FOB, CNF, and CIF quotes from major producing countries including Vietnam, Pakistan, India, Bangladesh, Indonesia, and Malaysia have risen by varying margins. The most notable increases were seen in C32S and above ring-spun, compact, and combed yarns, while lower-count open-end and coarse yarns saw relatively moderate adjustments.
This wave of price hikes is not driven by a single factor. The rebound of ICE cotton futures in early July provided cost-side support for overseas offers. Meanwhile, the comprehensive month-on-month recovery in textile and apparel exports from Vietnam, Pakistan, Bangladesh, and India from May to June signals rebounding overseas demand, emboldening mills to raise prices. Additionally, sharp consecutive increases in India's domestic S-6 spot prices and CCI auction floor prices directly pushed up Indian yarn export quotes.
Vietnamese Yarn: Slower Price Adjustments, Stronger Cost Advantage
Within the overall upward trend, Vietnamese yarn stands out. According to feedback from a major light textile import-export company in Shaoxing, inquiries and shipments of Vietnamese yarn in the first half of July significantly outperformed those of Indian, Pakistani, and Uzbekistani yarn. Two key reasons explain this: first, Vietnamese mills have been slower to adjust their overseas offers, with smaller increments compared to Indian and Pakistani yarns, maintaining a strong cost-performance advantage for C40S and below; second, geopolitical factors have created transport cost divergence.
The breakdown of peace talks between the U.S. and Iran, followed by multiple rounds of mutual strikes that nearly paralyzed the Strait of Hormuz, has driven a sharp rise in crude oil, energy, and chemical prices, while ocean freight costs have also surged back. Mills in India, Bangladesh, and Malaysia have had to raise CNF/CIF quotes to offset rising raw material, production, and transportation costs. In contrast, Vietnamese yarn benefits from land transport advantages via road and rail, creating a distinct cost competitiveness in logistics.
Port Inventories Decline, Short-Term Supply Tightens
According to arrival data, the volume of Uzbekistani cotton yarn, Pakistani siro-spun yarn, Taiwanese open-end yarn, and polyester-cotton yarn from Indonesia and Vietnam arriving at ports has been steadily decreasing over the past half-month. Simultaneously, a 'rush-to-export' phenomenon among some coastal textile and garment factories has further drawn down port inventories. Combined, these factors have led to a steady decline in port cotton yarn stocks.
This suggests that the supply side of imported cotton yarn will tighten in the near term. For weaving mills and traders reliant on imported yarn, the current price increases may only be a starting point. If Southeast Asian mills continue to raise quotes and ocean freight remains elevated, the landed cost of imported yarn will climb further.
Industry Impact: Cost Pass-Through and Order Rhythm
The impact of this round of overseas price hikes varies across the supply chain. For weaving mills, rising raw material costs will directly squeeze profit margins, especially for small and medium enterprises with limited bargaining power, potentially forcing production cuts or shifts. For traders, inventories locked in at lower prices earlier may become a source of interim profit, but new order negotiations are becoming more challenging.
From a macro perspective, the month-on-month rebound in Southeast Asian textile and apparel exports, combined with the 'rush-to-export' effect in China's textile and garment exports, suggests that the global textile supply chain is undergoing a short cycle of restocking and inventory building. However, whether this rebound is sustainable depends on the strength of end-consumer demand recovery and the evolving direction of geopolitical risks.