Cotton futures continue to decline, yet the cotton yarn market shows a rare divergence: low-and-mid count yarn mills are cutting prices to reduce inventory, while 60S and above high-count combed yarn ex-factory prices remain unchanged. This contrast is no accident—it reveals the true resilience of the cotton textile chain during the off-season: the pricing power of high-end capacity is becoming the scarcest asset in the industry's reshuffle.
Off-Season Game: Operating Rate vs. Inventory Pressure
Entering July, the off-season characteristics of the domestic cotton textile and apparel market became more pronounced. Most large and medium-sized cotton textile enterprises are finishing their previous orders, and to maintain stable operating rates, yarn mills are forced into price-cutting competition. According to industry public data, some large Xinjiang mills still maintain a high operating rate of 90%, with production not halted, but rotor-spun yarn and low-and-mid count ring-spun yarn categories are in a difficult position. Fluctuating cotton raw material prices, low-price impacts from inland yarn mills, and weakened purchasing willingness from coastal fabric manufacturers and intermediaries—multiple negative factors have slowed down the sales of finished products in Xinjiang large mills, increasing the risk and pressure of payment collection.
Downstream fabric weaving factories, cotton yarn dealers, fabric and garment processing plants generally adopt a low-inventory, thin-margin strategy, purchasing on demand and never hoarding. The game between upstream and downstream directly leads to white-hot competition in the cotton yarn market, continuously squeezing the profit space of small and medium-sized cotton textile enterprises. It is worth noting that despite the overall market pressure, high-count yarn has become a "safe haven"—ex-factory prices for 60S and above high-count combed and carded yarn remain basically stable, and high-end cotton yarn's resistance to decline is significantly better than that of low-and-mid end products. The logic behind this is that high-count yarn has high technical barriers and concentrated production capacity, and the rigid demand for quality from end-users supports its price floor.
Cost Transmission Failure: The Pricing Dilemma in the Dyeing Sector
The downstream dyeing and printing sector is facing a cost crisis. Since the beginning of 2026, dye prices have continued to rise, with an overall increase exceeding 65% by late July. In addition to dye price increases, dyeing auxiliaries and labor costs have also risen simultaneously, sharply increasing the processing cost burden for dyeing and printing enterprises. Forced by cost pressure, many dyeing and printing factories in Jiangsu and Zhejiang have raised dyeing and finishing processing fees. In Shaoxing, large dyeing factories have increased knitting fabric dyeing fees by 0.5 yuan per kilogram and woven fabric by 0.2 yuan per meter.
However, the fee increase seems limited, but with the current weak terminal consumption and low-price involution in the industry, weaving and garment enterprises find it difficult to quickly absorb the cost pressure from upstream, and cost transmission to downstream is clearly blocked. This means that the room for dyeing and printing enterprises to raise prices is limited, and profits are further squeezed. For buyers, the dyeing fee increase may prompt some orders to shift to lower-cost regions, but it is difficult to achieve in the short term.
Structural Signals: High-End Capacity and Cash Flow Management as Key
Looking at the entire industry chain, the cotton textile industry is at a low point in the off-season: upstream cotton futures are under pressure, midstream cotton yarn is in involution competition, and downstream dyeing costs are rising. But the traditional peak season "Golden September and Silver October" orders have not yet landed significantly, and the market lacks rigid support. Since late July, many inland cotton yarn manufacturers have introduced preferential discounts to clear inventory and accelerate shipments. This price-for-volume strategy may alleviate inventory pressure in the short term, but in the long run it will intensify vicious competition in the industry.
It is worth noting that the coexistence of high operating rates and slowing sales in large Xinjiang mills reflects the cash flow pressure brought by capacity rigidity. In the off-season, enterprises should pay more attention to cash flow management rather than blindly pursuing output. The firm market for high-count yarn suggests that product structure upgrading is an effective way to resist cyclical fluctuations.