The cotton textile chain is undergoing a typical off-season stress test: Zhengzhou cotton futures are weakening, cotton yarn markets are trapped in price wars, and dyeing processes are forced to raise fees due to rising dye costs. Despite the overall pressure, the firmness of high-count yarn and structural dyeing fee increases reveal a clear divergence in product categories and a mismatch in cost transmission.
Market Overview: Off-Season and Rising Costs Intensify Chain-Wide Competition
Since July, the off-season characteristics of the domestic cotton textile and apparel market have become more pronounced. Most large and medium-sized cotton spinning enterprises are finishing up earlier orders; to maintain operating rates, yarn mills are compelled to cut prices and increase volumes. According to industry feedback, since late July, many inland cotton yarn manufacturers have introduced discounts to clear inventory, yet prices for 60S and higher combed and carded yarns remain stable, showing stronger resistance to downturns compared to mid- and low-count products.
Downstream weaving mills, yarn distributors, and garment processors generally adopt low-inventory, thin-margin strategies, purchasing only as needed and avoiding stockpiling. The upstream-downstream tug-of-war has intensified competition in the cotton yarn market, squeezing profit margins for small and medium-sized spinning enterprises. Meanwhile, large Xinjiang mills maintain high operating rates of 90%, but face slower sales and rising payment recovery risks due to low-priced inland yarn and reduced coastal purchasing enthusiasm.
Dyeing Cost Transmission: The Logic Behind Fee Hikes
Since the beginning of 2026, dye prices have risen continuously, with cumulative gains exceeding 65% by late July. In addition to dyes, dyeing auxiliaries and labor costs have also increased, forcing many dyeing factories in Jiangsu and Zhejiang to raise processing fees: large dyeing mills in Shaoxing increased fees by RMB 0.5 per kilogram for knitted fabrics and RMB 0.2 per meter for woven fabrics.
The fee increases seem modest, but with weak terminal consumption and intense low-price competition, weaving and garment enterprises cannot quickly absorb upstream cost pressures, hindering downstream transmission. This implies that dyeing fee hikes are cost-push rather than demand-pull, which may further squeeze midstream profits in the short term but could help eliminate outdated capacity in the long run.
Industry Impact: Structural Opportunities and Risks Coexist
The cotton textile industry is in an off-season trough, yet structural signals deserve attention: the firmness of high-count yarn indicates relatively stable demand in the premium segment, while weakness in mid- and low-count yarn reflects intense competition in the mass market. For cotton spinning enterprises, this means the era of pure scale expansion is ending; product differentiation and refined operations are becoming keys to survival.
For buyers, the current period offers a window to optimize supply chains—mid- and low-count yarn prices are highly competitive, allowing long-term orders to be locked in. However, they should be cautious of cost fluctuations from dyeing fee increases and consider flexible pricing agreements with dyeing mills. For foreign trade companies, the off-season order shortage pushes them to develop high-value-added categories, such as high-count high-density fabrics or functional finishes, to avoid low-price competition.
Practical Recommendations
For Buyers - Leverage the current price drop in mid- and low-count yarn to sign quarterly or semi-annual framework agreements with mills, locking in current low prices. - Monitor the firm trend of high-count yarn; if your products target the mid-to-high end, consider stocking up in advance to avoid peak-season price hikes. - Negotiate dyeing fee adjustment mechanisms with mills, clarifying trigger conditions to prevent cost overruns from unilateral price changes.
For Foreign Trade Companies - Adjust product mix toward high-count yarn, differentiated blends, or functional fabrics to avoid the red ocean of price competition. - Strengthen cost accounting by incorporating dyeing fee increases into quotation models and establishing price linkage clauses with clients. - Track the landing of Golden September and Silver October orders, plan production capacity and raw material inventory in advance to avoid peak-season surprises.
Industry troughs often breed transformative opportunities. All parties in the cotton textile chain should proactively adjust strategies while waiting for the peak season to secure a favorable position in the next cycle.