39.81% - this is the operating rate of circular knitting machines in the Shaoxing area 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 temperature of the weaving sector under the dual pressure of high temperatures and weak orders. As operating rates continue to decline, price pressure on cotton and polyester yarns is no longer an expectation but a fact unfolding across the supply chain.
The Order Gap Behind Operating Data
The decline in operating rates since late July is not caused by a single factor. While hot weather has prompted some factories to proactively reduce loads, the more critical issue is weakening order support. Large-scale factories still have undelivered orders, maintaining operating rates of 50-70%, while small and medium circular knitting plants show significantly lower loads, with some even halting production. This divergence indicates that orders are concentrating among leading enterprises, while idle capacity among smaller producers is rising.
From an order structure perspective, the market is currently focused on negotiations for autumn/winter apparel orders, but geopolitical volatility has significantly increased resistance to large orders. This means that even when demand exists, it mostly comes in small batches with multiple production runs, which cannot support high operating rates in weaving factories. The direct consequence of this order gap is a slowdown in yarn procurement, pulling down spot market negotiations for cotton and polyester yarns.
The Transmission Logic Behind Yarn Price Pressure
For cotton yarn, declining downstream operating rates directly weaken terminal demand support. Low loads or halts among small and medium circular knitting plants mean contraction in rigid cotton yarn procurement; meanwhile, blocked autumn/winter orders weaken market expectations for the coming months. This combination of insufficient real demand and pessimistic expectations puts pressure on cotton yarn futures, driving a bearish trend.
Polyester yarn faces a similar situation. With weaving factory operating rates falling and terminal orders generally weak, procurement demand for polyester yarn has notably weakened. Unlike cotton yarn, polyester yarn is also influenced by fluctuations in raw material prices such as PTA and MEG, but current demand-side negatives clearly dominate. Spot negotiation centers are under pressure, and futures markets are also weak.
For buyers, this means bargaining space may expand, but they must also be wary of quality risks behind low prices. For factories, declining operating rates mean higher fixed cost allocation, further squeezing profit margins.
Differentiated Responses in Industrial Clusters
As an important industrial cluster for circular knitting, Shaoxing's operating rate data has a bellwether effect. The 39.81% rate is not only lower than the same period last year but also below market expectations. This data reflects that weaving enterprises in Shaoxing are experiencing a round of proactive or passive capacity contraction. Proactive ones are those using the hot weather to maintain equipment and adjust product structures; passive ones are factories forced to halt due to insufficient orders.
This differentiated response will accelerate industry reshuffling. Enterprises with scale advantages and order backlogs are expected to consolidate their market positions during the off-season, while small factories relying on scattered orders and lacking stable customers may face greater cash flow pressure. For yarn suppliers, this means adjusting customer structures - large customers offer more stable orders but may have longer payment terms; small customers offer better payment conditions but with greater order volatility.