The benchmark price of cotton yarn 21S settled at 23,366.67 CNY/ton on August 28, a figure that seems unremarkable at first glance. But when placed on a one-year timeline, the signal becomes clear: the current price is just 100 CNY/ton below the annual peak, and 1,466.67 CNY/ton above the yearly low. The sustained upward shift in the price center indicates that the cotton yarn market has moved from early-year consolidation into a sensitive high-level phase.
The supply-demand logic behind high prices
Annual statistics (August 28, 2025 – August 28, 2026) show that the lowest price for cotton yarn 21S was 21,900 CNY/ton, the highest was 23,466.67 CNY/ton, the median was 22,683.34 CNY/ton, and the yearly average was 22,601 CNY/ton. The current price exceeds the average by about 765 CNY/ton and sits in the high range for the year, suggesting that the past year's rally was not a short-lived spike but a sustained trend.
From a chain perspective, high cotton yarn prices typically correspond to either strong upstream cotton costs or robust downstream demand. If cost-driven, it implies tight cotton supply or reduced planting area; if demand-driven, it reflects full order books and stronger restocking intentions among weavers. Either way, for downstream buyers, it means rigidly rising raw material costs and further compression of profit margins.
Notably, the price change on August 28 was zero (0.00%), indicating a temporary equilibrium. Such high-level sideways movement often precedes a directional move: if demand fails to follow through, prices may face downward pressure; if supply tightens further, a breakout above the previous high is possible. For textile enterprises, this uncertainty itself is a major operational risk.
Transmission effects across the chain
Cotton yarn 21S is a core intermediate product in the textile chain, and its price fluctuations quickly transmit both upstream and downstream. Upstream, high yarn prices may stimulate cotton planting enthusiasm but could also encourage hoarding by traders, further pushing up raw material costs. Downstream, weaving mills and garment manufacturers face direct cost pressure, especially those producing knitted or woven fabrics primarily from cotton yarn; their quotations must rise accordingly.
However, the end-consumer market's acceptance lags. Brands and retailers have limited capacity to absorb cost increases; if final prices cannot rise in tandem, intermediate profits will be squeezed from both ends. In this scenario, small and medium-sized weaving mills may be forced to reduce operating rates or shift to blended or chemical fiber alternatives, altering local supply-demand structures.
From a regional cluster perspective, major cotton yarn producing areas such as Shandong, Henan, and Jiangsu will bear the brunt. Spinning mills in these regions can enjoy interim gains if they lock in orders at high levels; but if they blindly chase high prices to build inventory, the risk of inventory devaluation upon a price correction cannot be ignored. For downstream clusters like Nantong home textiles and Shengze weaving, raw material cost changes directly affect their product competitiveness.