When the ex-factory price of 60-count and above combed yarn remains rock-solid while mid- and low-count yarns are forced to offer discounts, the off-season divergence in the cotton textile industry is not a simple cyclical fluctuation but a concentrated release of industrial upgrade signals. Since late July 2026, Zheng cotton futures have been in a weak correction, and the traditional off-season combined with an order gap has pushed the entire chain into multiple pressures: insufficient orders, inventory build-up, and rising costs. But it is precisely this stress test that has brought the pricing power advantage of high-count yarn to the surface.
Data Behind the Industry
China Customs data shows that in July, the average export price of cotton yarn fell 3.2% year-on-year, but the average export price of 60-count and above high-count yarn rose 1.8% against the trend. This contrast confirms feedback from mills: inland yarn factories have generally introduced discounts to clear inventory, but high-count combed and carded yarn prices have remained stable, with high-end products showing significantly better resilience than mid- and low-end ones. Another noteworthy figure comes from the dye sector—from the start of spring 2026 to late July, dye prices have accumulated a rise of over 65%, with dyeing auxiliaries and labor costs also climbing, directly pushing up processing costs. Large dyeing factories in Shaoxing have already taken the lead in raising fees: knitting dyeing fees up 0.5 yuan per kilogram, and woven fabric up 0.2 yuan per meter.
These data sketch a clear transmission chain: upstream cotton futures are under pressure, midstream yarn is in a price war, downstream dyeing costs are surging, and weak terminal consumption prevents cost pass-through. Notably, large Xinjiang mills still maintain a high operating rate of 90%, but air-jet spun and mid- and low-count ring-spun yarns are struggling, with slower sales and rising risks of payment collection. This means that rigid capacity meets elastic demand, and the industry is trading profits for operating rates.
The Deep Logic of Chain Game
The current game is not about price but inventory strategy. Downstream weaving factories, yarn dealers, fabric and garment processors generally adopt a low-inventory, thin-margin principle, purchasing on demand and refusing to stockpile. This 'de-stocking' mentality directly leads to white-hot competition in the yarn market, squeezing the profit space of small and medium-sized spinners. But the firmness of high-count yarn reveals a key change: the terminal market's willingness to pay for differentiated, high-quality products has not disappeared, only temporarily suppressed by off-season sentiment.
The cost pressure in dyeing is more like a supply-side shakeout. The dyeing fee increase seems modest, but for weaving and garment enterprises operating on thin margins, it is a heavy blow. The consequence of blocked cost transmission is that some small and medium dyeing plants may be forced to cut capacity, while large dyeing factories with scale advantages and bargaining power will gain more order share. This 'Matthew effect' often accelerates in the off-season, forcing each link to reassess its cost control and product mix.
For cotton textile enterprises, the off-season is precisely a window to adjust product structure. The resilience of high-count yarn suggests that instead of fighting a price war in the low-count red ocean, it is wiser to shift toward higher value-added categories such as high-count, combed, and blended yarns. At the same time, the continued rise in dye costs will drive technological upgrades in dyeing, making the economics of low-liquor ratio dyeing and digital printing more attractive.
Rationality and Risk of Peak-Season Expectations
'Golden September, Silver October' orders have not yet materialized, but the market has begun to gamble in advance. Historically, mid-August to early September is the peak period for autumn/winter fabric orders. This year, due to the extended off-season, the order rhythm may shift later. However, caution is needed: if terminal consumption remains weak, peak-season orders may fall short of expectations, and high inventory will once again pressure cotton prices.
For buyers, the current price trough in mid- and low-count yarn offers an opportunity to lock in costs, but they need to assess suppliers' ability to sustain supply; for foreign trade enterprises, overseas demand for high-count yarn is relatively stable, and they can appropriately increase the weight of such orders. The urgent task for all links is not to passively wait for the peak season but to use the off-season window to optimize product structure, control inventory risks, and reserve flexible capacity for possible order rebounds.