Cotton Textile Chain Under Pressure in Off-Season: High-Count Yarn Holds Firm, Dyeing Fee Hikes Reveal Cost Transmission Dilemma

The cotton futures market is weakening, and the traditional off-season has created a demand vacuum, sending a chill through the entire cotton textile chain. However, a notable divergence is emerging between high-count and low-count yarns, which could provide key signals for future procurement strategies.

Market Divergence: Why High-Count Yarn Shows Resilience

Entering July, the off-season characteristics of the domestic cotton textile market became more pronounced. Most large and medium-sized mills are finishing their existing orders, and to maintain operating rates, they are being dragged into price-cutting competition. Yet, the ex-factory prices of 60S and above high-count combed and carded yarns remain stable, demonstrating significantly better resilience than mid-to-low-end products. This divergence is not accidental; high-count yarn corresponds to relatively rigid demand for high-end fabrics, and the production capacity is more concentrated, giving mills stronger pricing power. For buyers, this means locking in high-count yarn prices during the off-season may be more advantageous than waiting for the peak season.

Industrial Impact: Cost Pass-Through Blocked and Regional Competition Intensifies

The dyeing and finishing sector is facing severe cost challenges. Since the beginning of 2026, dye prices have continued to rise, with an overall increase exceeding 65% by late July, alongside higher auxiliary and labor costs. Under this pressure, many dyeing factories in Jiangsu and Zhejiang have raised processing fees. In Shaoxing, large dye houses have increased charges by RMB 0.5 per kilogram for knitted fabrics and RMB 0.2 per meter for woven fabrics. Seemingly modest, these increases are difficult to pass downstream due to weak terminal consumption, leaving fabric and garment makers with limited capacity to absorb costs.

Meanwhile, regional competition is intensifying. Large mills in Xinjiang maintain high operating rates of around 90%, but rotor-spun and mid-to-low count ring-spun yarns are struggling. Low-priced offers from inland mills and cooling demand from coastal fabric manufacturers and traders have slowed sales, raising the risk of delayed payments. This state of 'high operation, low profit' is essentially trading cash flow for market share, posing a severe test to the capital chains of small and medium enterprises.

Practical Recommendations

For Buyers - Monitor the off-season price window for high-count yarns and consider locking in orders for 60S and above to avoid peak-season price hikes. - Adopt a demand-based procurement strategy for mid-to-low count yarns, leveraging the current buyer's market to reduce inventory costs. - Assess the impact of dyeing fee increases on final products and prioritize partnerships with dye houses that have strong cost-absorption capabilities.

For Foreign Trade Companies - Closely track dye price trends and include cost adjustment clauses in quotations to protect margins from raw material fluctuations. - Optimize sourcing by leveraging price differences between Xinjiang and inland mills, balancing quality and cost. - Monitor the pace of 'Golden September, Silver October' order placements and secure high-count yarn capacity in advance to capture high-end market opportunities.