While low-count yarn mills are discounting to clear inventory, 60s and above combed yarns remain firm with stable ex-factory prices. This divergence is not accidental; it reflects the shifting supply-demand structure within the cotton textile chain during the off-season. The resilience of high-end products underscores the overcrowding and homogenized competition in the low-end segment.
Data Behind the Divergence
Since late July, several inland cotton yarn mills have introduced discounts to accelerate sales and ease inventory pressure. However, these price cuts have not stimulated significant orders, instead intensifying price wars in low and medium count yarns. Meanwhile, high-count combed and carded yarns have held firm, indicating sustained downstream demand for premium products, albeit with slower purchasing pace.
For buyers, this means that if their product positioning is in the low-count segment, bargaining power is extremely limited. Conversely, integrating into the high-count supply chain can maintain relatively stable profits even during the off-season. For mills, adjusting product mix towards higher counts has shifted from a strategic option to a survival imperative.
Transmission Blockage in the Chain
The off-season chill extends beyond yarn. Domestic cotton textile and apparel sales have shown increasingly pronounced off-season characteristics since July. Most large and medium-sized mills are finishing previous orders and, to maintain operating rates, are forced into discounting and volume-driven competition. Downstream weaving mills, yarn distributors, fabric and garment processors are adopting low-inventory, thin-margin strategies, purchasing only as needed. This upstream-downstream tug-of-war has intensified competition, squeezing profitability for small and medium-sized mills.
Notably, Xinjiang mills maintain high operating rates around 90%, but rotor-spun and low-count ring-spun yarns face difficulties. Fluctuating cotton prices, low-price competition from inland mills, and cooling demand from coastal weavers and traders have slowed Xinjiang mills' finished product sales and increased receivables risk. This implies that despite high operating rates, cash flow pressure may become a hidden risk in the next phase.
Printing and Dyeing Cost Shock
The downstream printing and dyeing sector is also under pressure. Since early 2026, dye prices have risen steadily, with cumulative gains exceeding 65% by late July. Auxiliaries and labor costs have also increased, burdening processing costs. Consequently, many dyeing factories in Jiangsu and Zhejiang have raised processing fees; in Shaoxing, large dyeing plants increased knit fabric dyeing fees by 0.5 yuan per kg and woven fabric by 0.2 yuan per meter.
Although these increases seem modest, weak end-consumption and industry-wide price wars make it difficult for weaving and garment enterprises to absorb upstream cost pressures quickly. Transmission to end consumers is blocked. Exporters should be alert: if dyeing fees rise further, export quotations may need recalculation to avoid silent profit erosion.
Waiting and Positioning
In summary, the cotton textile industry is in the trough of the off-season, with cotton futures under pressure, yarn competition intensifying, and dyeing costs rising. The industry can only wait for the 'Golden September and Silver October' orders to break the gloom. Rather than passively waiting, proactive adjustments are advisable: the firmness of high-count yarns points the way, and product upgrades and cost control will become the dividing line in the next round of competition.