In July 2026, a rare scissors gap emerged in the cotton textile chain: Zheng cotton futures kept falling while dyeing fees surged over 65%, prompting mills in Jiangsu and Zhejiang to raise processing charges—0.5 yuan per kg for knits and 0.2 yuan per meter for wovens. This divergence signals a rapid shift of profit from spinning to dyeing, leaving weavers and garment makers to recalculate costs during the off-season.
Background
Public data from the National Cotton Market Monitoring System shows that Zheng cotton futures have weakened since late July. Some inland spinners offered small discounts on regular yarns to move inventory, but prices for 60s and above combed and carded yarns remained stable. This indicates that high-count yarns hold stronger pricing power, while low-count yarns are more exposed to price wars in a sluggish market.
Regionally, large mills in Kashgar, Aksu, and Shihezi in Xinjiang maintained operating rates around 90%, but profits for open-end and low-to-mid count ring-spun yarns faced triple pressure: raw material price fluctuations, price cuts by inland mills, and slower offtake by coastal weavers and traders. Finished goods inventories and longer payment cycles have become new headaches for these large producers.
Meanwhile, dye prices have climbed over 65% since the start of the year, coupled with rising auxiliary and labor costs, sharply increasing pressure on dyeing and finishing plants. A major dyeing mill in Shaoxing took the lead in raising fees—0.5 yuan per kg for knits and 0.2 yuan per meter for wovens—followed by peers in Jiangsu and Zhejiang. Though the increases seem modest, downstream players need time to absorb them amid weak final demand, potentially slowing order placement.
Industry Impact
The impact of dyeing fee hikes varies along the chain. For spinners, dyeing is not a direct cost, but downstream weavers and garment makers may cut purchases due to higher costs, indirectly intensifying competition in the cotton yarn market. For weavers and garment factories, dyeing fees account for a small share of total costs, yet in a low-margin off-season, any additional cost can strain cash flow.
A deeper change is the redistribution of profits. Traditionally, profits concentrated at the raw material and brand ends. Now, dyeing plants gain temporary pricing power due to dye cost surges, while spinning mills are forced to concede margins due to overcapacity and weak demand. This rebalancing suggests that low-count yarn capacity may accelerate consolidation, while high-count and differentiated products will command higher premiums.
For buyers, dyeing fee hikes may trigger ripple effects: higher fabric procurement costs without corresponding retail price increases, forcing brands and traders to squeeze intermediary margins. Some orders may shift from Jiangsu/Zhejiang dye houses to lower-cost regions like Shandong or Hubei, but dye prices are national, so relocation may not fully offset cost pressures.