Cotton Yarn Price Divergence: Widening Gap Between 21S and 32S Signals Shifts in Shandong Mills' Pricing Strategy

On August 7, 2026, cotton yarn quotes from several Shandong mills revealed a warning signal: the price gap between 21S and 32S high-config knitting yarns reached up to 3,400 RMB/ton, compared to around 2,000 RMB/ton a year earlier. This widening gap is not merely cost-driven but reflects structural demand divergence. While low-count yarns compete fiercely on price, high-count yarns retain pricing power, mirroring downstream fabric makers' product mix adjustments.

Event Background

The quotes involved four Shandong-based mills, including Weifang Guanjie, Jinyi Yarn, Runfengda, and Guanxing Textile, all offering ring-spun, ecru, high-config, first-grade knitting yarns. For 21S, prices ranged from 22,700 to 24,200 RMB/ton, a spread of 1,500 RMB; for 32S, the range was 24,300 to 26,400 RMB/ton, a spread of 2,100 RMB. Notably, Jinyi and Runfengda in Weifang quoted identical prices for both counts, while Guanjie quoted the highest for 21S but fell below Shandong Hongyang Chemical's domestic yarn for 32S.

This pricing divergence indicates differing views on raw material inventory costs, order books, and market outlook. Guanxing's 21S quote of 22,700 RMB/ton was the lowest, 1,500 RMB below the highest, giving buyers significant negotiation room. For small weaving mills, this directly impacts monthly processing margins.

Industry Impact

From an industrial belt perspective, Shandong's Weifang and Guanxian are key cotton yarn production bases. The quotes concentrated in Weifang, while Guanxing is in Guanxian, showing regional price gaps. The convergence of Weifang quotes suggests intense local competition and follow-the-leader pricing, whereas Guanxing's low-price strategy may stem from lower raw material costs or higher inventory pressure. This regional price gradient offers cross-regional arbitrage opportunities but requires careful quality consistency checks.

More significant is the price structure between 21S and 32S. Typically, 32S costs 1,500-2,000 RMB more than 21S, but the current maximum gap of 3,400 RMB far exceeds the norm. This implies stronger demand resilience for 32S, likely due to a shift toward mid-to-high-end knitted garments requiring better strength and evenness. Meanwhile, 21S competition has intensified, with some quotes nearing cost lines, risking quality fluctuations after aggressive discounting. For buyers, this means limited room to bargain on low-count yarns, but a justified premium for high-count quality.

From the raw material perspective, cotton yarn prices are influenced by cotton costs, processing fees, and supply-demand dynamics. The absence of a one-way decline suggests mills are balancing costs and orders. If downstream demand remains weak, low-count prices may face further pressure, while high-count prices are relatively resilient due to technical barriers. This will push some mills to adjust product mixes, reducing low-count capacity and developing high-count or differentiated products, but equipment upgrades take time, so short-term structural volatility will persist.

Practical Recommendations

For Buyers - Establish a cross-regional price comparison mechanism, focusing on Weifang and Guanxian spreads; consider cross-region procurement when the gap exceeds 800 RMB/ton, but verify supplier credentials first. - Be cautious when bargaining on 21S; low prices may come with quality variations. Request batch inspection reports and include quality claim clauses. - For orders dominated by 32S, accept a moderate premium but lock in long-term agreements to avoid peak-season price spikes, and monitor cotton futures to hedge raw material costs.

For Foreign Trade Companies - When quoting export orders, calculate costs separately by yarn count instead of using a uniform markup, as high-count yarns offer more premium space and can enhance competitiveness. - Monitor RMB exchange rates and cotton import quota policies; if raw material costs fluctuate sharply, include price adjustment clauses in contracts to hedge currency and material risks. - Leverage the Shandong industrial cluster by maintaining backup relationships with multiple suppliers to quickly switch sources when abnormal quotes arise, ensuring delivery stability.