On August 4, the quotation sheets from major cotton yarn producing areas in Shandong revealed a warning signal: for the same 21S high-grade ring-spun knitting yarn, different mills quoted between 22,700 and 24,200 RMB/ton, a spread of up to 1,500 RMB/ton; for 32S, the spread expanded to 2,100 RMB/ton. This significant price gradient for identical specifications is not merely explained by quality differences but more by market supply-demand dynamics and varying inventory pressures.
Behind the Price Divergence: Premium Yarn's 'High Premium' Is Being Diluted
In the past, high-grade yarn, due to stable quality and strong downstream recognition, typically maintained firm quotations. However, these quotations from multiple Shandong enterprises show that the lowest prices for both 21S and 32S come from larger enterprises, such as Guanxing Textile quoting 22,700 RMB/ton for 21S and 24,300 RMB/ton for 32S, while some smaller mills quote higher. This anomaly indicates that leading enterprises are proactively lowering prices to secure orders and reduce inventory, while smaller mills, constrained by rigid costs, cannot follow suit and maintain high listings, with actual transaction prices possibly already discounted.
From the spread structure, the conventional spread between 21S and 32S is 1,600-2,000 RMB/ton, but in some quotations, the spread is only 1,300-1,600 RMB/ton, suggesting weakening downstream preference for 32S or more intense competition in higher-count yarns. For buyers, this means greater room for one-on-one negotiation, especially for knitting mills with large volumes, which can secure better settlement terms through multiple rounds of price comparison.
Industry Impact: Profit Squeeze Forces Product Structure Adjustment
The loosening of cotton yarn quotations directly compresses the processing profit of the spinning segment. Taking 21S high-grade ring-spun as an example, if cotton is priced at 17,000 RMB/ton, and processing costs including electricity, labor, and depreciation are considered, the processing fee corresponding to a selling price of 22,700 RMB/ton is already near the break-even point. This implies that enterprises relying solely on volume sales of conventional varieties may see profit margins below 3%, and a slight misstep could lead to losses.
Such pressure is forcing enterprises to adjust product structures. On one hand, some may reduce production of commodity items like 21S and 32S, shifting to blended, functional yarns, or higher-count varieties; on the other hand, as a major cotton yarn producing area, Shandong's price movements will transmit to downstream grey fabrics and knitted garments, benefiting fabric enterprises in the short term by lowering costs, but in the medium to long term, it may cause structural supply imbalances.
It is noteworthy that the quotations include a 'domestic' label, with local Shandong brands dominating, indicating that the impact of imported yarn is currently limited. However, if domestic yarn prices continue to weaken, the cost-effectiveness of imported yarn may re-emerge, and foreign trade enterprises should closely monitor the price spread between domestic and imported yarns.