39.81%—that is the operating rate of large circular knitting machines in Shaoxing as of August 6, down 2.77 percentage points from the previous week and 5.05 percentage points year-on-year. Behind this figure lies the real pressure on the weaving sector from both high temperatures and weak orders. When utilization drops below 40%, procurement of cotton and polyester yarn inevitably slows, delaying confirmation of a price bottom.
The Logic Behind Declining Utilization
The decline in weaving utilization is not caused by a single factor. Since late July, persistent high temperatures have directly limited production scheduling, especially for small and medium-sized circular knitting mills, whose load has dropped to extremely low levels, with some even temporarily halting production. Large-scale mills still have undelivered orders, maintaining utilization at 50-70%, but they are notably cautious in taking new orders.
More critical is the change on the demand side. Current market negotiations focus on some autumn/winter apparel orders, but due to volatile geopolitical situations, signing large orders faces significant resistance. This means that even when orders exist, they tend to be small-lot, multi-batch short orders, which do not help mills maintain continuous production. The decline in utilization thus becomes self-reinforcing: lower utilization → less procurement → weaker prices → more cautious stockpiling.
Cotton and Polyester Yarn: Price Stalemate Amid Weak Demand
For cotton yarn, the continued decline in downstream weaving utilization, with small and medium circular knitting mills running at low loads or even stopping, directly weakens rigid demand. Poor autumn/winter order signing leaves terminal demand unsupported, putting pressure on spot prices. Futures markets are also pressured by weak demand expectations, showing a bearish trend. The long-short score of -1 reflects the market's lack of confidence in a short-term rebound.
Polyester yarn faces a similar situation. Weaving mill utilization has fallen, terminal orders are generally weak, and procurement demand for polyester yarn is soft, with spot negotiation centers continuing to move down. Unlike cotton yarn, polyester yarn is also affected by fluctuations in raw material prices such as PTA and MEG. Cost support is intermittent, giving prices greater elasticity, but the current trend is clearly downward.
For buyers, this means more room for price negotiation, but they should also be wary of a "falling price trap"—if utilization bottoms out and recovers, prices may rebound quickly, and excessive waiting could cause them to miss the opportunity to build positions at low levels.
Industrial Belt Reaction and Outlook
Shaoxing, as an important domestic circular knitting cluster, its utilization data has a bellwether effect. The 39.81% rate is not only lower than the same period last year but also below market expectations, reflecting cautious autumn/winter stockpiling by terminal apparel brands. Geopolitical uncertainty raises risks of order fulfillment and exchange rate fluctuations, prompting brands to delay orders and shorten lead times.
This trend toward "short orders" places higher demands on factory scheduling. Flexibly adjusting product mix, increasing spot varieties, and shortening delivery cycles have become strategies for weaving mills to cope with low utilization. For upstream yarn producers, low utilization means rising inventory pressure, and price promotions may become common, but with limited room—raw material costs still provide some support.
Historically, after mid-August, as high temperatures ease, weaving utilization tends to rebound seasonally. If autumn/winter orders gradually materialize then, demand for cotton and polyester yarn may improve marginally. However, until geopolitical situations clarify, the probability of large orders is low, and prices are more likely to fluctuate at the bottom.
Practical Recommendations
For Buyers - Monitor weekly utilization changes in major clusters like Shaoxing and Shengze; if it rises for two consecutive weeks, treat it as an early signal of demand recovery and appropriately increase raw material stockpiles. - Use the current bargaining space to sign short-term floating price contracts with suppliers to lock in some low-cost goods while retaining adjustment flexibility. - Prioritize suppliers with spot inventory and short delivery cycles to cope with the "short-order" trend from end customers.
For Foreign Trade Companies - Amid geopolitical uncertainty, include clauses for exchange rate fluctuations and logistics costs in quotations to avoid profit erosion after price locking. - Shift focus to small-lot, quick-response orders, and establish flexible production cooperation mechanisms with weaving mills to reduce the risk of large order defaults. - Closely track policy changes in destination countries for autumn/winter fabric exports and adjust product structures in advance, such as increasing the proportion of functional fabrics to enhance added value.
The low level of weaving utilization is both a true reflection of current weak demand and a process of market clearing. When utilization begins to recover from the bottom, that may be the signal for cotton and polyester yarn prices to stabilize. Until then, staying cautious and flexible is wiser than blindly bottom-fishing or panic selling.