Industry monitoring data as of August 6 shows that the operating rate of large circular knitting machines in Shaoxing has fallen to 39.81%, down 2.77 percentage points from the previous week and 5.05 percentage points year-on-year. This figure not only hits a new low for the year but also reflects the real situation of the weaving sector under the dual pressure of high temperatures and weak orders. With the operating rate below 40%, nearly 60% of capacity is idle, rapidly weakening the pull on upstream cotton and polyester yarn demand.
Divergence across industrial belts
From the perspective of capacity structure, the decline in weaving operating rates is not evenly distributed. Large-scale factories still have orders to deliver, maintaining operating rates of 50-70%, while small and medium circular knitting mills are running at low loads due to insufficient orders, with some having temporarily halted production. This divergence is particularly evident in Shaoxing, Changshu, and other circular knitting clusters—large mills rely on existing orders to hold the bottom line, while small mills respond directly to the off-season by stopping production.
It is worth noting that the decline in operating rates is not a short-term fluctuation. The 5.05-percentage-point year-on-year drop indicates that this year's order prosperity is significantly weaker than last year. Geopolitical uncertainties continue to disrupt the signing of large foreign trade orders, and some brands are splitting orders into small batches with multiple deliveries, further complicating production scheduling for small and medium factories. For upstream yarn companies, this means the pace of terminal demand recovery will be slower than expected.
Cotton and polyester yarn: demand under pressure, prices lack upward momentum
The decline in operating rates directly transmits to the yarn segment. For cotton yarn, lower weaving loads and hindered autumn/winter order signing have led terminal procurement to focus on just-in-time replenishment, with spot negotiation centers continuing to shift downward. Futures markets are pressured by weak demand expectations, with long sentiment lacking confidence and trends turning bearish. Polyester yarn faces similar demand-side bearishness—lower weaving operating rates mean reduced consumption of polyester yarn, while fluctuations in raw materials PTA and MEG fail to provide effective cost support, keeping spot prices weak.
From the perspective of industrial chain transmission, the weaving operating rate is a leading indicator of yarn demand. For every percentage point drop in the current operating rate, monthly yarn consumption could decrease by thousands of tons (based on regional capacity estimates). If high temperatures persist until mid-to-late August, operating rates may dip further, leading to passive inventory accumulation and intensified price competition. For spinning mills, this means more cautious inventory control to avoid overstocking during weak demand.
Autumn/winter orders: how much luster will the delayed 'golden nine, silver ten' retain?
The market is not entirely without highlights. Some autumn/winter clothing orders have begun negotiation, but geopolitical volatility is creating significant resistance to large order signing. Brands tend to postpone orders to avoid transportation and exchange rate risks. This means the traditional 'golden nine, silver ten' peak season stocking may be compressed into a shorter cycle, and once orders are released intensively, a short-term pulse in demand may occur.
For yarn traders, this is both an opportunity and a trap—stocking up too early may lead to inventory depreciation, while stocking up too late may miss the market movement. Overall, before operating rates stabilize, yarn prices are likely to remain in a weak consolidation. The real turning-point signals should focus on two aspects: first, whether operating rates in Shaoxing and other places can stop falling and rebound; second, whether autumn/winter large orders can achieve substantive contract signings.