On August 28, cotton yarn quotes from several Shandong mills showed unusual divergence: mainstream 21S high-grade knitting yarn ranged 22,800-24,200 CNY/ton, while 32S was quoted at 24,700-26,400 CNY/ton, widening the spread to 1,900-2,200 CNY/ton. This level is notably above recent averages, signaling subtle shifts in downstream demand structure. For buyers and mills, this is both a risk and an opportunity.
Event Background Quotes came from local mills including Guanxing Textile, Guanjie Textile, Jinyi Yarn, and Runfengda Textile, with delivery points in Weifang and across the province. For 21S, Guanxing quoted a low 22,800 CNY/ton while Guanjie offered a high 24,200 CNY/ton, a 1,400 CNY/ton gap. For 32S, Hongyang Chemical quoted 26,400 CNY/ton while Guanxing offered 24,700 CNY/ton, a 1,700 CNY/ton spread. Such wide dispersion within the same region and specification usually indicates a lack of a unified pricing anchor, with buyers and sellers in a tug-of-war.
Notably, Guanxing offered relatively low prices for both counts, while Guanjie was on the higher end. These strategic differences likely stem from varying inventory levels, order backlogs, and market outlooks. For buyers, this means potential savings of over a thousand yuan per ton by simply comparing suppliers, making price-shopping highly rewarding.
Industry Impact The widening 21S-32S spread reflects a shift in end-demand preferences. 32S yarn is used mainly in knitted fabrics and apparel, while 21S is more common in heavier textiles and home textiles. When 32S remains firm and 21S weakens, it suggests apparel orders are supporting finer counts more than home-textile products. This structural divergence will likely prompt mills to adjust production plans, shifting some capacity from 21S to 32S, which could alter the supply-demand balance in the coming weeks.
Increased quote dispersion complicates procurement decisions but also gives buyers leverage, especially for 21S, where lower quotes may set a price anchor and drag transaction prices down. Mills maintaining high quotes without sales support risk inventory buildup and may resort to discounts later.
From a chain perspective, cotton yarn price movements quickly transmit upstream to cotton procurement and downstream to grey fabric pricing. If divergence persists, weaving mills may shift to more cost-effective yarn sources, forcing mills to optimize costs. Foreign trade companies must also monitor the spread, as yarn costs are a major component in export quotations, and fluctuations directly affect profit margins.