A 65% surge in dye prices, inventory pressure at 90% operating rates, and a clear divergence between high-count and low-count yarns—these three figures sketch the most authentic picture of the current cotton textile chain. With upstream costs and downstream demand squeezing from both ends, the industry is at a delicate point of 'quantity-price divergence'.
Market Status: Pressure from Fiber to Garment
Zheng cotton futures have entered a weakening correction channel since late July, with the price center gradually moving down. Meanwhile, downstream orders have not been released as expected, and the chill of the traditional off-season has spread from coastal weaving markets to large Xinjiang cotton mills. Industry data shows that most large and medium-sized cotton spinning enterprises are finishing their existing orders one after another, forcing yarn mills into price-cutting competition to maintain operating rates.
Notably, the market is not uniformly weak. Ex-factory prices for 60S and above high-count combed and carded yarns remain stable, with premium products showing stronger resilience than mid-to-low-end items. This indicates that structural upgrades in demand are still ongoing, but the volume is insufficient to support the overall market.
Chain Transmission: Dyeing Fee Hikes and Cost Bargaining
The pressure on the printing and dyeing sector is equally significant. Since the beginning of 2026, dye prices have accumulated a rise of over 65%. Coupled with rising auxiliaries and labor costs, many dyeing factories in Jiangsu and Zhejiang have raised processing fees. For instance, in Shaoxing, large dyeing mills have increased fees by 0.5 yuan per kilogram for knitted fabrics and 0.2 yuan per meter for woven fabrics.
While the fee hikes seem modest, downstream weaving mills and garment factories cannot easily absorb the cost increase given weak consumer demand and intense competition. The blocked cost pass-through means that the price increases by dyeing mills are more 'defensive' than proactive. The bargaining between upstream and downstream is reshaping the profit distribution across the chain.
Regional and Category Divergence: Xinjiang vs. Inland Mills
Xinjiang's large cotton mills maintain a high operating rate of 90%, with production not halted, but open-end spun yarn and mid-to-low count ring-spun yarn categories are struggling. Fluctuating raw material prices, low-price competition from inland mills, and cooling demand from coastal weaving mills and intermediaries have slowed product sales and raised the risk of payment collection.
In contrast, many inland yarn mills have introduced discounts since late July to clear inventory. This 'price-for-volume' strategy may ease cash flow in the short term, but if demand does not improve, price wars will only further compress the industry's overall profit margins.
Peak Season Expectations and Key to Breaking the Deadlock
The entire industry is now waiting for the 'Golden September and Silver October' peak season orders. Historical experience suggests that September and October are usually peak periods for restocking in both domestic and export markets. However, the uncertainty this year lies in the speed of consumer confidence recovery and whether upstream costs can be passed on smoothly.
For buyers, current prices for mid-to-low count yarns are relatively low, offering a window to lock in costs in batches. For mills, rather than passively cutting prices, it is better to adjust product mix and tilt towards high-count and differentiated categories.