The off-season effect in the cotton textile industry is accelerating, with inventory pressure and profit compression resonating across the upstream and downstream supply chain. According to the latest survey by the China Cotton Textile Association on major national cotton textile markets, from raw materials to fabrics, all segments exhibit typical off-season characteristics: weakening demand, fragmented orders, and intensifying price negotiations.
Raw Material Market Diverges, Cost Transmission Faces Hurdles
Cotton prices experienced a rise followed by a fall in late June. News of the U.S.-Iran agreement boosted external markets, pushing the Zhengzhou Cotton Exchange main contract to 16,140 yuan per ton. However, after the macro sentiment faded, weak demand in the traditional off-season for cotton yarn quickly suppressed the rally, with the main contract falling to 15,615 yuan per ton. The market currently lacks single-directional driving factors, and prices are likely to remain range-bound.
Polyester staple fiber was more significantly dragged down by raw material costs. The Strait of Hormuz shipping volume recovered to nearly 60% of pre-conflict levels, oil prices fell sharply, and the geopolitical premium was almost fully unwound. The polyester chain followed with a decline, pushing staple fiber futures to around 6,900 yuan per ton. For spinning mills, lower raw material costs should ease pressure, but yarn prices have fallen in tandem, leaving actual profits unchanged.
Viscose staple fiber shows short-term supply-demand mismatch. Mills face tight shipments, and traders have raised prices due to supply constraints. However, downstream viscose yarn sales face pressure, with yarn prices weakening. This 'raw material up, yarn down' scissors effect directly compresses spinners' margins.
Spinning Sector: Destocking Pressure Spreads from Standard to Differentiated Products
The pure cotton yarn market remains broadly stable, but quoted prices are effectively declining, with traders offering discounts. Actual transaction prices stay low. Spinners' finished goods inventories are slowly accumulating; downstream weaving operating rates are falling, gray fabric inventories are high, and autumn/winter orders have not yet materialized. Companies are generally cautious about the outlook.
The off-season atmosphere is also evident in colored-spun and differentiated yarns. High-count differentiated products maintain relatively stable demand, but standard varieties face significant destocking pressure. Differentiated yarn mills operate at full capacity, but order lead times have shortened to about one month, with new orders mainly small and scattered. Product inventories have not increased, but price competition is intensifying, further squeezing profits.
Polyester-blended yarns are hit by falling raw material prices and the off-season, with spot trading further weakening. Downstream buyers purchase only for immediate needs, mills have insufficient orders, and product inventories are under pressure. Viscose yarn is constrained by downstream just-in-time buying, with few new orders and weak prices.
Fabric Sector: Operating Rates Decline, Export Uncertainty Rises
The off-season persists in gray fabrics, with slower shipments, few new orders, and rising finished goods inventories. Weaving mills purchase raw materials only as needed, with extremely low stockpiling willingness. Raw cotton prices have dropped by about 300 yuan per ton, and high-count pure cotton yarn prices have fallen by about 180 yuan per ton. Fabric product prices are easing locally, leaving razor-thin margins.
The denim market is sluggish both domestically and internationally. Downstream orders have shrunk, factory operating rates are declining, finished goods sales are poor, and companies are accelerating destocking. Notably, the strengthening U.S. dollar adds uncertainty to the export environment. Industry players are closely monitoring export trends and assessing future market directions.