Price trend

This week, upstream cotton prices declined, and cotton yarn prices remained weak but stable. As of February 6th, the spot price of 21S cotton ring-spun yarn in Shandong province was approximately 22,200 RMB/ton, unchanged from last week; the spot price of 32S cotton ring-spun yarn was approximately 23,600 RMB/ton, also unchanged from last week.

Market Analysis:

As the Spring Festival approaches, the market is entering its final stages, with mainland textile companies gradually suspending operations and going on holiday. Downstream market purchasing activity has significantly weakened. Companies that remain operational are mainly focused on producing inventory or accelerating the completion of existing orders, with a noticeable lack of new orders. The price of 32S cotton yarn remains weak but stable, while high-count yarns continue to sell well and maintain firm prices. Most downstream fabric factories are on holiday, suspending new orders, resulting in very few transactions. It is expected that most mainland textile companies will be on holiday next week, and the market will largely come to a standstill, with yarn prices remaining stable. (Most large factories in Xinjiang do not take holidays during the Spring Festival, while mainland textile companies typically take 3-7 days off. The decline in demand in the mainland market has some impact on the production and sales of Xinjiang textile companies, but overall orders remain relatively abundant.)

Regarding imported yarn: Current import yarn prices remain stable, and market attention has shifted from immediate transactions to future shipment arrangements. Traders are focusing on pre-sales and accepting orders for after the holidays. In terms of inventory, newly arrived Indian yarn has replenished supplies, while Vietnamese 32S yarn is relatively scarce due to strong demand.

Operating Status: This week, small textile enterprises in mainland China have been gradually shutting down operations, with operating rates in mainland China at around 50%, while operating rates in Xinjiang remain above 90%. As of February 5th, the operating load of textile enterprises in mainstream regions was 60.5%, a decrease of 5.76% compared to last week, indicating a significant decline in operating rates.

Inventory Situation: Yarn inventories increased significantly this week, as most downstream fabric mills have shut down and suspended purchases. Finished yarn inventory in Xinjiang is approximately 34-38 days, while inland enterprises have inventories of around 15-21 days. As of February 5th, the average yarn inventory for textile enterprises in major regions was 32.3 days, a weekly increase of 3.53%.

Cost side: This week, the cotton market continued its range-bound fluctuations. ICE U.S. cotton remained weak, while domestic spot prices were relatively strong. With more downstream companies closing for the holidays, demand is showing signs of weakening. It is expected that the cotton market will lack effective driving forces before the holidays, and will continue to adjust in the short term.

Demand side: As the Spring Festival approaches, the operating rate of the textile industry has significantly decreased due to migrant workers returning home. Currently, raw material prices remain high, and downstream users generally hold cautious expectations for new orders next year. Most manufacturers have canceled their centralized stocking plans and are adopting a wait-and-see approach. The overall market is focused on cash flow recovery, with some fabric prices being moderately reduced to encourage replenishment by intermediaries. According to statistics, as of February 5th, the average operating rate of the domestic cotton textile industry was 29.79%, a decrease of 5.83% compared to the previous period.

Market outlook

Cotton yarn prices are expected to remain stable. With most textile companies in mainland China closing for the holidays next week, the market will experience a brief lull, and cotton yarn prices will fluctuate within a narrow range.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.