The cotton textile industry is entering a deep adjustment phase. According to the 127th market survey by the China Cotton Textile Association, the deepening off-season has left enterprises grappling with shrinking orders, rising finished goods inventories, and squeezed profit margins. Divergent trends in raw materials—cotton rising then falling, polyester staple fiber declining, and viscose staple fiber strengthening—have further fueled downstream purchasing caution.
Raw Material Market: Logic Behind Divergent Trends
Cotton prices experienced a roller-coaster ride. The US-Iran agreement briefly boosted global financial markets, driving Zhengzhou cotton futures to 16,140 yuan/ton. However, the macro sentiment soon faded against industrial realities—the downstream cotton yarn market remains in its traditional off-season, lacking substantial drivers. Prices subsequently fell to 15,615 yuan/ton. This volatility reflects the market's ongoing struggle to balance geopolitical premiums with weak fundamentals. For textile enterprises, this means extremely compressed procurement windows, with any chasing of highs risking being caught at peaks.
Polyester staple fiber tells a different story. The recovery of Hormuz Strait shipping to nearly 60% of pre-conflict levels has almost entirely erased the oil price premium from geopolitical tensions. With cost-side risk premiums squeezed out, the polyester chain entered a catch-up decline, with staple fiber futures falling to around 6,900 yuan/ton. This drop directly impacts polyester-blend yarn producers, forcing prices down but without triggering demand release, instead deepening market wait-and-see sentiment.
Viscose staple fiber stands out as the only stable-to-strong performer. Reduced factory rebates and tight trader supply have pushed prices up, with tight delivery conditions likely to persist. However, downstream viscose yarn sales face clear pressure, with yarn prices weakening. This suggests that viscose's strength stems more from supply-side contraction than genuine demand recovery.
Yarn Market: Inventory Reduction Takes Center Stage
Survey data shows the pure cotton yarn market continuing its off-season pattern. Mill quotes remain stable, but trade-level discounting is widespread, with actual transaction prices at low levels. Finished goods inventories are slowly accumulating, downstream weaving mill operating rates are declining, and grey fabric inventory pressure is rising. The absence of autumn/winter order releases has left enterprises cautious about future prospects.
Specialty segments like vortex-spun yarn, color-spun yarn, and differentiated yarn have not been spared. Vortex-spun viscose and polyester-viscose yarns are weak in both volume and price, with mills producing mainly small orders. Color-spun yarn sees stable demand for high-count differentiated varieties, but regular varieties face heavy destocking pressure. Differentiated yarn mills maintain full capacity but suffer from poor order continuity and squeezed margins due to price competition.
Polyester and viscose yarns further confirm market weakness. Polyester yarn prices remain unstable following raw material drops, with downstream buyers purchasing only for immediate needs. Order books are underfilled, and inventory pressure mounts. Viscose yarn faces a scissors gap—rising raw material costs but falling yarn prices—with slow transaction speeds and few new orders.
Fabric Market: Weaving Mills Under Pressure
The fabric side is equally challenging. Pure cotton grey fabric shipments have slowed, with orders mainly small and quick-turn. Finished goods inventories are accumulating visibly. Mills are adopting a hand-to-mouth raw material procurement strategy, showing minimal willingness to build stocks. This approach reflects deep uncertainty about future market direction.
Yarn-dyed fabric markets lack new order momentum. Raw cotton prices have fallen by about 300 yuan/ton, but cotton yarn prices struggle to hold firm, with high-count pure cotton yarn dropping by about 180 yuan/ton. Fabric product prices have loosened in some areas, leaving thin profit margins. Denim fabric faces dual pressure: sluggish domestic demand with reduced orders, and external challenges from a strengthening US dollar, which increases export environment uncertainty. Enterprises are accelerating inventory clearance.
Industry Impact: From 'Inventory Reduction' to 'New Balance'
The deepening off-season essentially reflects a rebalancing of supply and demand. Volatile raw material prices combined with persistently weak end-demand have pushed inventory pressure upstream through the chain. For textile enterprises, the core task has shifted from expanding production to digesting inventories.
From a procurement strategy perspective, short-term price fluctuations have not stimulated stockpiling but instead reinforced a cautious 'buy-as-needed' approach. This contrasts sharply with previous years when enterprises would pre-stock for autumn/winter orders. If this wait-and-see sentiment persists, it could further suppress raw material prices, creating a negative cycle.
For export enterprises, the strengthening dollar coupled with uncertain foreign trade orders complicates pricing and profit management. Some companies have already adjusted export strategies, turning to domestic markets or emerging markets for breakthroughs.