When Zhengzhou cotton futures trace a weak correction in the off-season, every link of the cotton textile chain tastes the same bitterness: insufficient orders, rising inventories, and rigid cost increases. Customs data show that cotton yarn trading has been sluggish since July, with prices for low-to-mid count yarns generally softening, while 60S and above high-count combed yarns remain rock-solid. This divergence is not accidental—it reveals a structural shift in terminal demand, where high-end fabric orders stay relatively stable while mass consumer markets sink into price-sensitive involution.
The Off-Season Dilemma: Cost Transmission from Spinning to Dyeing
As July progresses, the off-season characteristics of the domestic market become more pronounced. Large and medium-sized spinning enterprises are finishing their earlier orders, and some mills are forced to cut prices to maintain operating rates. Industry data show that many inland cotton yarn manufacturers have introduced discount promotions since late July, with reductions ranging from 200 to 500 yuan per ton. Meanwhile, large Xinjiang mills maintain high operating rates of 90%, but finished product sales have slowed markedly, raising the risk of delayed payments. This 'high utilization, low turnover' operation is eroding corporate cash flow safety margins.
Cost pressures are equally formidable. Since the start of 2026, dye prices have climbed persistently, with cumulative gains exceeding 65% by late July. Beyond dyes, printing and dyeing auxiliaries and labor costs have also risen, pushing up processing costs. Under this pressure, many dyeing factories in Jiangsu and Zhejiang have raised processing fees—large dyeing mills in Shaoxing increased knit fabric fees by 0.5 yuan per kilogram and woven fabric by 0.2 yuan per meter. While the increases seem modest, in a weak terminal consumption environment, weaving mills and garment factories cannot quickly absorb them, creating a bottleneck in the cost transmission chain.
Chain Game: High-Count Yarn's Haven Effect and Competitive Divergence
Notably, high-count yarn has become a bright spot in the off-season. Prices for 60S and above high-count combed and carded yarns remain stable, with superior resistance to declines compared to mid- and low-count products. This is underpinned by demand structure—rigid demand for quality in high-end shirts and home textiles keeps orders relatively stable. However, this haven effect cannot cover the entire industry. Air-jet spun yarn and low-to-mid count ring-spun yarn face tough conditions. Inland mills' low-price impact, coastal weaving factories' and traders' reduced purchasing willingness, and multiple negative factors combine to intensify competition in the cotton yarn market, squeezing profit margins for small and medium-sized enterprises.
Upstream-downstream gaming further exacerbates divergence. Downstream weaving mills, cotton yarn distributors, fabric and garment processors generally adopt low-inventory, thin-margin strategies, purchasing on demand and avoiding stockpiling. This cautious stance reduces liquidity in the cotton yarn market, distorting price signals. For buyers, this may mean short-term bargaining room expands, but long-term supply stability faces challenges; for factories, balancing operating rates and profit margins becomes a brutal survival battle.
Golden September and Silver October: The Gap Between Expectations and Reality
The industry pins hopes on the 'golden September and silver October' peak season. However, reality may be more sobering. The macro environment of weak terminal consumption remains unchanged, and foreign trade orders still face uncertainty from overseas inventory cycles. Even if peak-season orders materialize as expected, they may not fully absorb current high inventories and cost pressures. More notably, dyeing fee hikes could further dampen downstream stockpiling intentions, forming a negative feedback loop of 'cost push—demand wait-and-see.'
Feedback from industrial clusters shows that dyeing and weaving enterprises in Shaoxing and Shengze have begun adjusting production schedules, with some advancing maintenance to August to cope with potential order gaps. This proactive contraction strategy may be more pragmatic than passive waiting.