While the market fixates on the weakening Zheng cotton futures, a neglected signal is building within the cotton textile chain: dye prices have surged over 65% this year, yet dyeing fee hikes are failing to pass downstream. This is not just a cost issue; it reflects a reshaping of bargaining power across the chain. Currently, the cotton textile industry is undergoing a deep off-season adjustment, and the firmness of high-count yarn versus the price war in medium-low count yarn reveals a new normal of structural divergence.
Background: Off-Season Dilemma and Price Divergence
Since late July, the domestic cotton textile market has entered its traditional off-season, with Zheng cotton futures starting a weak correction and market demand remaining sluggish. According to industry public data, most large and medium-sized cotton mills are winding down previous orders. To maintain operating rates, yarn mills are forced into price-cutting competition. However, not all products are under pressure: 60S and above high-count combed and carded yarns remain firm, with ex-factory prices basically stable, showing superior resilience compared to medium-low count products. This divergence indicates that downstream demand for high-end fabrics still holds, while the medium-low end is mired in a red ocean.
Meanwhile, Xinjiang large mills maintain a high operating rate of 90%, but rotor-spun and medium-low count ring-spun yarns face difficulties. Multiple negative factors—fluctuating cotton prices, low-price competition from inland mills, and cooling purchase intentions from coastal fabric mills and intermediaries—have slowed finished product sales and raised the risk of payment recovery. This reflects that in a weak demand period, supply chain capital pressure is transmitting from downstream to upstream.
Industrial Impact: Blocked Cost Pass-Through and Dyeing Fee Hikes
The dyeing and finishing sector downstream has become a new focal point of contradiction. Since the start of 2026, dye prices have continued to rise, with an overall increase exceeding 65% by late July. Combined with rising dyeing auxiliaries and labor costs, dyeing enterprises' processing costs have surged. Under pressure, multiple dyeing factories in Jiangsu and Zhejiang have raised processing fees, with large dyeing mills in Shaoxing increasing knit fabric fees by 0.5 yuan per kilogram and woven fabric by 0.2 yuan per meter.
However, the fee hike appears limited in scope but is difficult to digest quickly due to weak end consumption and low-price involution. Weaving and garment enterprises cannot pass costs to consumers, blocking downstream transmission. This means the price increase is more of a 'passive response' than 'active pricing', and profit margins remain squeezed. For buyers, higher dyeing fees will directly push up fabric costs, but weak bargaining power may ultimately erode their own profits.
Practical Recommendations
For Buyers - Focus on high-count yarn and high-end fabric suppliers, and lock in long-term agreements to hedge against dyeing fee fluctuations. - Use the off-season window to negotiate tiered pricing with dyeing mills, placing orders in batches to spread cost pressure.
For Foreign Trade Enterprises - Include dyeing fee floating clauses in quotations to avoid cost increases eroding profits. - Optimize product mix toward high-count and differentiated products to avoid medium-low end price wars.
In summary, the cotton textile industry is at a low ebb, with the entire chain under pressure. However, the firmness of high-count yarn and the 'testing' of dyeing fee hikes indicate that the market is self-adjusting. As 'Golden September and Silver October' approaches, if orders are released as expected, the stalemate may be broken; but if demand remains weak, an industry reshuffle will be inevitable. For practitioners, cautious and strategic positioning now is more important than blind optimism.