In mid-July, the international cotton yarn market experienced a notable price surge. Export offers from major producers such as Vietnam, Pakistan, India, Bangladesh, and Indonesia saw varying increases, with C32S and above ring-spun, compact, and combed yarns rising the most, while low-count open-end and coarse yarns adjusted more moderately. This wave of price hikes is not an isolated event but the result of multiple factors: the rebound of ICE cotton since early July, the month-on-month recovery of textile and apparel exports from Southeast Asian countries in May and June, and the continuous and significant increases in Indian domestic S-6 spot and CCI auction prices.
Market Drivers
On the raw material side, the ICE cotton rebound directly raised the cost base for global cotton yarn. India's domestic cotton price hikes further squeezed mill margins, forcing exporters to raise offers. Meanwhile, the rebound in Southeast Asian textile exports indicates recovering downstream demand, giving mills the confidence to pass on costs. Notably, second- and third-tier Indian yarn mills, which had been active with lower offers, have significantly reduced their listings and quotations in July, reflecting a reluctance to sell amid price hike expectations.
Vietnamese Yarn's Competitive Edge
Amid the general price increase, Vietnamese yarn stands out. According to industry traders, inquiries and shipments of Vietnamese yarn in the first half of July have been notably better than those of Indian, Pakistani, and Uzbekistani yarn. Two reasons account for this: first, Vietnamese mills have been slower to adjust their offers, and the magnitude of increases is smaller than those of Indian and Pakistani yarn, maintaining the cost-effectiveness of C40S and below specifications; second, geopolitical factors have reinforced Vietnam's logistics advantage. The breakdown of US-Iran peace talks and subsequent blockades in the Strait of Hormuz have not only pushed up oil, energy, and chemical prices but also caused ocean freight to rise again. Mills in India, Bangladesh, and Malaysia have had to raise CNF/CIF offers to cope with rising costs of raw materials, production, and transportation, while Vietnam's reliance on road and rail transport offers more flexible cost control.
Port Stocks and Pre-emptive Export Effect
Over the past half-month, port cotton yarn inventories have been steadily declining. On one hand, arrivals of Uzbekistani cotton yarn, Pakistani Siro yarn, Taiwanese open-end yarn, and Indonesian/Vietnamese polyester-cotton yarn have decreased. On the other hand, some coastal textile and garment enterprises are engaging in short-term "pre-emptive exports," accelerating inventory drawdown. This two-way tightening on both supply and demand sides suggests that cotton yarn prices may gain further support in the short term. For buyers, the current window of opportunity is narrowing.