The imported cotton yarn market is undergoing a new round of price adjustments. Since early July, major exporting countries such as Vietnam, Pakistan, and India have raised their foreign quotes to varying degrees, but the sales performance has diverged significantly. Vietnam yarn, with its moderate price increases and stable cost performance, has outperformed Indian and Pakistani yarns in both inquiries and actual transactions.
Three Drivers Behind the Price Hikes
The recent foreign quote increases are not driven by a single factor. First, the rebound of ICE cotton futures in early July directly pushed up the cost of cotton yarn. Second, from May to June, textile and apparel exports from Southeast Asian countries like Vietnam, Pakistan, Bangladesh, and India rebounded month-on-month, providing support for quote hikes. Third, Indian domestic S-6 spot prices and CCI auction base prices have risen sharply over the past week, further elevating Indian cotton yarn quotes.
Notably, the magnitude of increases varies by product category. C32S and above ring-spun yarn, compact yarn, and combed yarn saw larger FOB, CNF, and CIF price hikes, while low-count open-end yarn and coarse yarn adjustments were relatively smaller. This means downstream buyers face greater cost pressure on high-end yarns, while the cost performance of low-count yarns may become more prominent.
Vietnam Yarn's Differentiated Advantage
According to feedback from a large textile import and export company in Shaoxing, Vietnam yarn inquiries and shipments in the first half of July were significantly better than those for Indian, Pakistani, and Uzbek yarns. Two key factors explain this phenomenon.
First, price strategy differences. Vietnam yarn mills were slower to adjust their foreign quotes compared to other Southeast Asian mills, and the increase was smaller than that of Indian and Pakistani yarns. For C40S and below specifications, Vietnam yarn's cost performance advantage continued to attract orders. Second, transport cost dynamics. The breakdown of US-Iran peace talks and tensions in the Strait of Hormuz drove up crude oil, energy, and chemical prices, leading to higher sea freight costs. Indian, Bangladeshi, and Malaysian mills had to raise CNF and CIF quotes to offset rising raw material, production, and transport costs. In contrast, Vietnam yarn mills leveraged road and rail transport advantages, avoiding sea freight risks and maintaining relatively stable quotes.
Port Inventory Decline and 'Rush to Export' Effect
Over the past half-month, arrivals of Uzbek cotton yarn, Pakistani siro-spun yarn, Taiwanese open-end yarn, and Indonesian/Vietnamese polyester-cotton yarn at ports have continued to weaken. Meanwhile, some coastal textile and garment factories are engaging in short-term 'rush to export' activities, further accelerating inventory drawdown. As a result, port cotton yarn inventories are steadily declining.
This trend implies tighter short-term supply for buyers, particularly for specific categories like siro-spun yarn and open-end yarn, which may face premiums. However, the inventory decline could also support future prices, narrowing the bargaining space for imported yarn.