As Zhengzhou cotton futures enter a weak correction channel, the off-season pressure on the cotton textile chain is transmitting from raw materials to processing. In early August, the expected stocking tide did not materialize; instead, structural divergence became more apparent: medium-low count yarns were forced to cut prices to move inventory, while high-count combed yarn prices remained unchanged. This divergence is not accidental—it reflects deeper changes in downstream demand structure rather than simple seasonal fluctuation.
Market Divergence: High-Count Resilience vs. Medium-Low Count Competition
Feedback from cotton spinning mills indicates that since late July, many inland yarn factories have offered discounts to clear inventory, but such concessions are mainly concentrated in medium-low count ring-spun and open-end yarns. In contrast, prices for 60S and above high-count combed and carded yarns have remained stable, showing better resistance to price cuts. This suggests that demand for high-count yarns is relatively rigid, as their applications (e.g., high-end shirts, home textile fabrics) are less affected by the off-season, while medium-low count yarns face fiercer price competition due to weak mass-market apparel demand.
For buyers, this means greater bargaining power for medium-low count yarns during the off-season, but they must be wary of quality compromises from suppliers under inventory pressure. For high-count yarns, suppliers focus more on maintaining customer relationships, leaving limited room for price negotiation.
Cost Transmission Blocked: The Ripple Effect of Dye Price Hikes
The downstream dyeing sector is under another cost pressure. According to industry public data, dye prices have cumulatively risen by over 65% since the beginning of 2026, coupled with higher auxiliary and labor costs, significantly increasing processing expenses. In response, multiple dyeing mills in Jiangsu and Zhejiang have raised processing fees, with a large dyeing factory in Shaoxing increasing fees by RMB 0.5 per kilogram for knitted fabrics and RMB 0.2 per meter for woven fabrics.
However, these increases are difficult to pass through amid weak terminal consumption. Weaving mills and garment enterprises generally adopt low-inventory, thin-margin strategies, purchasing on demand and avoiding stockpiling. This leaves upstream cost pressure trapped in the dyeing sector. A Shaoxing dyeing mill manager noted that while fee hikes partially alleviate cost pressure, insufficient order volumes remain the biggest challenge. The result is further compression of dyeing enterprises' profit margins, with some small and medium dyeing factories beginning to reduce night shifts to control energy costs.
Industrial Belt Response: Divergent Operating Rates Between Xinjiang and Coastal Weaving
On the raw material side, fluctuating cotton prices, low-price competition from inland mills, and cooling demand from coastal weaving factories and intermediaries have collectively slowed sales for large Xinjiang cotton spinning enterprises, increasing receivable collection risks. Despite this, local factory operating rates remain high at around 90%, with production continuing. This reflects Xinjiang mills' expectations for Q4 orders—stopping production would not only lose skilled workers but also miss potential market rebounds.
However, high operating rates also mean accumulating inventory pressure. Industry feedback shows that finished goods inventory days at Xinjiang mills have increased by 5-7 days compared to early July, prompting some enterprises to divert products through trading channels rather than direct price cuts. In contrast, smaller coastal weaving factories are more flexible in adjusting operating rates, some reducing to below 70% to cope with order shortages.
Outlook: Can Q4 Orders Bring a Turning Point?
The cotton textile industry is currently in an off-season trough, with upstream cotton futures under pressure, midstream yarn price competition, and downstream dyeing cost increases. The entire industry is waiting for the release of orders during the traditional Q4 peak season. Historically, late August to early September is a key window for autumn/winter fabric stocking, but the strength of terminal consumption recovery remains uncertain this year.
Notably, the resilience of high-count yarns may signal structural opportunities: as consumption upgrades, demand for high-end fabrics shows greater tenacity, while conventional products are more susceptible to macroeconomic fluctuations. For cotton spinning enterprises, rather than competing on price in the low-count red ocean, accelerating product upgrades toward high-count, blended, and functional directions is more prudent. Meanwhile, sustained dye cost increases may prompt dyeing enterprises to optimize processes and reduce dye usage, potentially catalyzing the industry's green transformation.