Since late July, overseas cotton yarn prices have generally risen, yet shipments at Chinese coastal ports have slowed. This divergence between rising prices and cooling demand reveals a structural mismatch in the current cotton yarn trade—cost-push inflation is meeting a lukewarm response from the demand side.
Background
According to feedback from cotton yarn trading companies in Guangdong, Jiangsu, Zhejiang, and Fujian, since late July, ICE cotton futures have fluctuated upward, India's CCI auction floor prices have been raised consecutively, and export growth from Bangladesh, Vietnam, and India has accelerated both month-on-month and year-on-year in June-July. Consequently, FOB/CNF/CIF quotes for Vietnamese, Indian, Indonesian, Bangladeshi, and Uzbek yarns have generally increased moderately. This means that the dual support of raw material costs and overseas demand is pushing up the pricing center of imported yarn.
Notably, Pakistani yarn has moved independently. Due to stable domestic demand, restricted export transactions, and falling Pakistani cotton prices caused by quality decline in the 2026/27 new crop, Pakistani cotton yarn export prices remained stable, hardly following the hikes by competitors like Vietnam and India. This divergence indicates that different cost structures across origins are reshaping the pricing landscape, offering potential bargaining space for buyers.
Meanwhile, quotes for polyester-cotton yarn in bonded warehouses and on ships from Vietnam and Indonesia have shown little fluctuation, with mills and traders adopting a wait-and-see attitude. The market seems to be waiting for clearer directional signals rather than blindly following price increases.
Industry Impact
Price hikes have not ignited purchasing enthusiasm. Constrained by continuous 100% transaction rates in central reserve cotton sales, the end of the World Cup, and weak growth in cotton product export orders, since late July, inquiries and orders for bonded and shipment cotton yarn from coastal weaving mills, fabric mills, and garment factories have continued to decline compared to May and June. Some cotton yarn traders in Guangdong, Jiangsu, and Zhejiang report slowing shipments and rising inventory pressure.
This suggests that the main driver of overseas yarn price increases is supply-side costs, not demand-side pull. When domestic weaving mills face insufficient export orders, their acceptance of high-priced imported yarn naturally decreases, prompting them to seek more cost-effective alternatives. In fact, quotes for some Vietnamese second- and third-tier brands' open-end yarn have not only failed to follow the uptrend but have slightly declined, coupled with slightly lower quotes for Pakistani slub yarn and 21-32S ring-spun yarn, attracting coastal weaving mills and intermediaries to search for low-priced, suitable goods at ports and bonded warehouses.
For traders, slowing shipments mean rising capital turnover pressure, potentially prompting some to cut prices to destock, thereby intensifying price competition in port spot markets. For weaving mills, this is an opportunity to optimize procurement structures—locking in low-priced sources amid a general uptrend can hedge cost pressures and reserve raw materials for future orders.