The recent surge in offshore cotton yarn prices since July is not driven by a single factor but represents a concentrated release of three pressures: raw material costs, shipping expenses, and geopolitical risks. According to Chinese customs data, India's domestic S-6 spot prices and CCI auction floor prices have been raised significantly in the past two weeks, directly pushing up the export costs of Indian cotton yarn. Meanwhile, the textile and apparel exports of Vietnam, Pakistan, Bangladesh, and other countries rebounded month-on-month in May and June, further strengthening suppliers' willingness to raise prices.
Price Transmission and Regional Divergence
In terms of price adjustment magnitude, the FOB, CNF, and CIF offers for medium-to-high count yarns such as C32S and above ring-spun, compact, and combed varieties have seen the most significant increases, while the adjustment for low-count open-end and coarse-count yarns has been relatively moderate. This divergence signals two things: first, high-count yarns have a higher raw material cost share and are more sensitive to cotton price fluctuations; second, downstream weaving mills show stronger demand resilience for mid-to-high-end products, allowing suppliers to pass on costs.
Notably, Vietnamese yarn has exhibited a clear 'lag and moderation' in this price hike. According to feedback from a large Shaoxing-based light textile import-export company, in the first half of July, inquiries and sales of Vietnamese yarn significantly outperformed those of Indian, Pakistani, and Uzbekistani yarn. The core reason is that Vietnamese mills not only adjusted their offshore offers later than other Southeast Asian mills but also did so to a lesser extent, maintaining a strong cost-performance advantage for C40S and below specifications.
Transportation Costs and Geopolitical Disruptions
The collapse of US-Iran peace talks and subsequent blockages in the Strait of Hormuz have not only pushed up crude oil and energy prices but also led to a renewed surge in ocean freight rates. Mills in India, Bangladesh, and Malaysia have been forced to raise their CNF and CIF offers to cover the triple pressure of rising raw material, production, and transportation costs. In contrast, Vietnam, leveraging its road and railway transport networks connected to China, has effectively circumvented shipping bottlenecks, further amplifying its price competitiveness through logistics cost advantages.
Port inventory data shows that arrivals of Uzbekistani cotton yarn, Pakistani siro yarn, Taiwanese open-end yarn, and Indonesian/Vietnamese T/C yarn have been declining over the past half month. Meanwhile, some coastal textile and garment factories are engaged in short-term 'rush-to-export' activities, accelerating the depletion of port stocks. The steady decline in inventories provides suppliers with stronger confidence to support prices.