When the fates of high-count and low-count yarns diverge sharply during the off-season, the adjustment within the cotton textile chain may be more profound than mere price fluctuations. As of late July, Zhengzhou cotton futures continued their weak correction, while downstream orders have yet to show substantial progress for the 'Golden September and Silver October' period. The entire industry is repricing under the squeeze of a demand vacuum and rising costs.
Data Divergence: High-Count Yarn Resilience vs. Low-Count Yarn Involution
Public market feedback indicates that since late July, several inland cotton yarn mills have proactively offered discounts to clear inventory, but ex-factory prices for 60S and above high-count combed and carded yarns have remained basically flat, becoming rare resilient varieties during the off-season. In contrast, rotor-spun yarn and mid-to-low count ring-spun yarns are struggling, with price cuts and volume runs becoming the norm. This divergence is not accidental—high-count yarn corresponds to relatively rigid demand for high-end fabrics, while mid-to-low count yarns are highly homogeneous and more susceptible to price wars when terminal consumption weakens.
For buyers, this means the bargaining space for mid-to-low count yarns is expanding, but quality fluctuation risks must be monitored; the stable prices of high-count yarns reflect the tight balance in their supply chain. From an industrial belt perspective, large Xinjiang mills maintain a high operating rate of 90%, but finished product sales have slowed, and payment recovery pressure has risen, with inland mills' low-price competition compressing their profit margins.
Cost Transmission: The Chain Reaction of Dye Price Hikes
The cost pressure in the printing and dyeing segment is becoming a new variable. Since the beginning of 2026, dye prices have cumulatively surged over 65%, coupled with rising dyeing auxiliaries and labor costs, prompting multiple dyeing factories in Jiangsu and Zhejiang to raise processing fees. In Shaoxing, large dyeing plants have increased fees by RMB 0.5 per kilogram for knitted fabrics and RMB 0.2 per meter for woven fabrics. This seemingly modest increase is difficult for weaving and garment enterprises to pass on downstream amid low-price involution, significantly hindering cost transmission.
This implies that even if upstream cotton prices stabilize, midstream yarn price cuts, and downstream dyeing cost rigidity will still squeeze profits across the chain. For small and medium garment factories relying on outsourced dyeing services, per-unit costs may increase by 3%-5%, while terminal retail prices cannot be adjusted upward simultaneously, further narrowing gross margins.
Peak Season Expectations: From 'Waiting' to 'Proactive Adjustment'
Currently, the industry chain generally adopts low inventory and on-demand procurement, intensifying upstream-downstream gaming. Most large and medium cotton spinning enterprises are finishing existing orders and are forced into price-cutting competition to maintain operating rates, while downstream weaving factories, yarn dealers, and garment processors adhere to thin-profit operations and avoid stockpiling. This deadlock may persist until 'Golden September and Silver October' orders materialize, but historical patterns suggest that peak-season restocking demand often begins in mid-to-late August, when cotton yarn transactions may see a pulse of volume.
However, this year's peak season may be weaker than previous years. The slope of terminal consumption recovery is unclear, and high dye costs will suppress dyeing plants' expansion willingness; some orders may lock in dyeing fees in advance. For foreign trade enterprises, attention should be paid to RMB exchange rate fluctuations and the overseas destocking cycle to avoid overstocking under peak-season expectations.