The cotton yarn quotes from several Shandong mills on August 28 revealed a subtle signal: 21S ring-spun high-grade yarn was mainly quoted at 22,800-24,200 CNY/ton, while 32S ranged from 24,700 to 26,400 CNY/ton, with high-low spreads of 1,400 and 1,700 CNY respectively. This spread level is uncommon in recent months, implying that pricing power in the high-grade yarn market is shifting from sellers to buyers, and cost control and customer structures are directly reflected in price lists.
Regional Quote Divergence
As an important production base for ring-spun yarn, Shandong's quote dynamics often mirror the national cotton yarn market. Among the six sample enterprises, the lowest 21S quote came from Guanxing Textile at 22,800 CNY/ton, while the highest was from Weifang Guanjie at 24,200 CNY/ton. For 32S, Guanxing again offered the lowest at 24,700 CNY/ton, while Shandong Hongyang Chemical topped at 26,400 CNY/ton. Notably, the four Weifang-based enterprises showed highly similar quotes: 21S at 23,100 CNY/ton, and 32S fluctuating narrowly between 24,800 and 25,200 CNY/ton.
This intra-regional convergence and inter-regional divergence suggest that Weifang yarn traders tend to follow market average pricing, while Guanxing, as a large enterprise, has more autonomy in its pricing strategy. For buyers, this means that for the same yarn quality, a price gap of several hundred yuan per ton can be found among different suppliers, often corresponding to inventory pressure and capital turnover needs.
Industrial Implications of Narrowing Spread
The cross-count spread between 21S and 32S is also noteworthy. Based on the lowest quotes, 32S is 1,900 CNY/ton higher than 21S; based on the highest, the gap is 2,200 CNY/ton. This level has narrowed compared to the same period last year, indicating that the premium for higher count yarns is weakening. The underlying drivers include sluggish downstream knit fabric orders and the substitution effect of chemical fibers on mid-to-low count yarns—when end apparel brands cut costs, the cost-effectiveness of 32S is undermined, and buyers tend to replace it with 21S or blended yarns.
For spinning mills, the narrowing spread means further compression of profit margins. In the cost structure of ring-spun high-grade yarn, cotton accounts for over 70%, and cotton price fluctuations affect 21S and 32S almost synchronously. When selling prices cannot cover rising costs, mills either increase operating rates to dilute fixed costs or shift to differentiated products. From these quotes, most mills stick to the high-grade route, but Shandong Hongyang Chemical's 26,400 CNY/ton quote is noticeably higher than peers, possibly due to special customer channels or product certifications.
Transmission and Outlook
Fluctuations in cotton yarn quotes transmit quickly along the supply chain. For weaving mills, the current spread structure enables more refined procurement decisions: if the order requires 32S, choosing the lowest quote from Guanxing or Jinyi can save 1,600-1,700 CNY per ton; if 21S can be substituted, the cost advantage is even more obvious. This substitution effect is particularly significant in the knitting sector, where 21S and 32S are interchangeable in some knit fabrics, affecting only hand feel and weight.
Foreign trade enterprises need to pay attention to the linkage between exchange rates and quotes. Current quotes are in CNY, while export orders are mostly settled in USD, so RMB exchange rate fluctuations directly impact actual profits. During the late August quote window, if the RMB weakens, exporters can lock forward orders; otherwise, they should quote cautiously. Additionally, the continued impact of the Xinjiang cotton ban makes exporters more concerned about raw material traceability, and high-grade cotton yarn in Shandong using imported cotton may imply additional compliance costs in the quotes.