Polyester Chain Weakens Collectively, Cotton Textile Futures Also Under Pressure, Market Sentiment Turns Cautious

At the noon close on July 28, China's futures market saw a broad decline in textile raw material contracts. PTA fell 1.37% to 5628 points, polyester staple fiber dropped 1.20% to 7250 points, cotton yarn slipped 1.00% to 22265 points, and cotton declined 0.69% to 15830 points. Bottle-grade chip also weakened, down 0.97% to 7122 points. This session marks a typical day of synchronized pressure across both the polyester chain and the cotton spinning chain in nearly a month.

Weakening Upstream Cost Support PTA, as the core raw material of the polyester industry chain, led the decline in the sector, directly dragging down the cost anchors of polyester staple fiber and bottle-grade chip. According to publicly available industry data, recent softening of PX prices, coupled with narrowing naphtha cracking margins, has pushed PTA processing fees to near breakeven levels. This means that even with maintenance expectations on the supply side, the decline in upstream costs still dominates price formation. For polyester staple fiber and bottle-grade chip, the collapse in raw material prices has directly compressed profit margins, weakening the purchasing willingness of downstream spinning and soft drink packaging industries.

Cotton Spinning Chain: Weak Demand Expectations The simultaneous decline of cotton yarn and cotton reflects the sluggishness of end-use textile demand. China Customs data shows that the growth rate of textile and apparel exports in the first half of 2026 has slowed significantly compared to the same period last year, as restocking orders from European and American markets have not been released as expected. The cotton yarn futures contract fell below the 22,500-point mark, with high spot market inventories being the main factor suppressing prices. For cotton, the closing price of 15,830 points is close to the average ginning cost line for this year. If prices continue to decline, it may trigger stop-loss operations from some hedging positions, further increasing market volatility.

Industrial Cluster Reactions and Inventory Game Feedback from major textile industrial clusters such as Keqiao and Shengze indicates that the operating rates of weaving enterprises have been declining slightly since late June. Grey fabric inventories generally remain above 30 days, and some enterprises have started production cuts to cope with financial pressure. The decline in polyester staple fiber and cotton yarn futures prices has further reinforced the "buy on rising, not on falling" mentality downstream. Traders and weavers mostly choose to destock previous inventories, with new orders mainly consisting of essential small lots. This destocking rhythm will continue to exert downward pressure on raw material prices in the short term.

Divergence Between Hedging and Speculative Forces Notably, the open interest for PTA and cotton did not shrink significantly during this decline, indicating that divergence between bulls and bears is widening. Industrial capital tends to buy hedges at low price levels to lock in processing profits, while speculative capital continues to add short positions based on macroeconomic expectations and crude oil fluctuations. This pattern of divergence suggests that textile raw material prices may not be in a one-sided downtrend at current levels but are entering a process of oscillating to find a bottom. For foreign trade enterprises, exchange rate fluctuations and the decline in freight rates have, to some extent, offset the profit space brought by lower raw material costs, but price pressure from end customers persists.

Practical Recommendations ### For Buyers - Avoid large-scale bargain hunting at current levels; it is advisable to maintain weekly rolling replenishment and control raw material inventory at 15-20 days. - Monitor changes in PTA and cotton open interest. If a clear signal of price rebound with reduced open interest appears, consider increasing the proportion of forward point pricing appropriately.

For Foreign Trade Enterprises - Use the window of futures decline to renegotiate pricing terms for short-term orders with overseas customers to lock in processing fees. - Beware of the substitution effect of Southeast Asian yarn on cotton yarn. Prioritize blended or differentiated products when accepting orders to avoid price wars in conventional pure cotton varieties.