The cotton textile industry chain is undergoing a significant de-stocking phase. The latest market survey by the China Cotton Textile Association shows that from raw materials to fabrics, all segments are facing shrinking orders, slowing shipments, and compressed margins, with market confidence at a low point in recent years.
Raw Material Divergence: Cotton Volatile, Polyester Declines, Viscose Tight
Cotton prices have been volatile recently. Driven by macro sentiment from the US-Iran agreement, external cotton prices rose, lifting the Zhengzhou Cotton Exchange's main contract to 16,140 yuan/ton. However, as speculative enthusiasm cooled and downstream cotton yarn entered the traditional off-season, the industrial sector lacked sustained momentum, and prices quickly fell back to around 15,615 yuan/ton. Overall, the cotton market is stuck in a stalemate, likely to continue range-bound trading in the short term.
Polyester staple fiber's trend is clearer—downward. With the Strait of Hormuz shipping volume recovering to nearly 60% of pre-conflict levels, geopolitical premiums have almost completely unwound, leading to a sharp drop in crude oil prices. This cost collapse has directly transmitted to the polyester chain, with short-fiber futures falling to around 6,900 yuan/ton. Future direction depends on whether end-users will restock after the price drop.
Viscose staple fiber is following an independent path. Due to tight factory deliveries and reduced rebates, trader prices have risen. This supply tightness is unlikely to ease soon, but downstream yarn sales pressure is also significant. The market generally expects viscose fiber prices to remain stable, with little chance of major increases or decreases.
Yarn Market: Inventory Accumulation and Order Fragmentation
Pure cotton yarn continues in the off-season pattern. While mills' quoted prices are generally stable, trade channels are offering discounts, keeping actual transaction prices low. Finished product inventories are slowly accumulating, downstream weaving operating rates are declining, denim fabric inventories are building, and autumn/winter orders have yet to materialize. Companies remain cautious about the outlook.
Vortex-spun and colored spun yarns are also under pressure. Vortex-spun viscose and polyester-viscose yarns are weak in both volume and price, while polyester yarn prices are slightly down. Companies rely on small orders to maintain production-sales balance. For colored spun yarn, demand for high-count differentiated varieties is relatively stable, but de-stocking pressure for regular varieties is significant, with a lack of terminal orders and strong wait-and-see sentiment.
Differentiated yarn companies maintain full capacity utilization, but order continuity is poor, dominated by small and scattered orders. As the off-season deepens, operating rates are gradually declining, price competition among yarns is intense, and profit margins are further shrinking. Polyester yarn prices have followed raw material declines, with spot trading further weakening and inventory pressure increasing. Viscose yarn prices are weak, with slow transactions. Operating rates and inventories remain at previous levels, and the market is expected to remain stable.
Fabric Sector: Declining Operating Rates and Rising Export Uncertainty
The off-season continues for full-cotton grey fabrics, with shipments slowing noticeably. Orders are mainly small-volume, quick-response ones, with few new orders. Finished product inventories are accumulating, putting increasing pressure on weaving mills. Raw material procurement is mostly on an as-needed basis, with little willingness to build inventory.
The yarn-dyed fabric market is generally slowing, with normal operating rates but weak new orders. Raw cotton prices have dropped by about 300 yuan/ton, and high-count pure cotton yarn prices have fallen by about 180 yuan/ton. Fabric product prices are loosening in some areas, leaving thin profit margins.
The denim fabric market is cold both domestically and internationally, with reduced downstream orders, declining factory operating rates, and slow product shipments. Companies are accelerating de-stocking, but the strengthening US dollar index adds new uncertainty to exports. Industry players are closely monitoring export trends with a cautious outlook.