This week, international cotton markets trended stronger; domestic markets followed suit with gains, albeit showing signs of waning momentum. Cotton yarn prices in the market largely remained stable, though a few spinning mills raised their quoted prices. As of May 15, the benchmark spot price for 21S cotton ring-spun yarn in China's Shandong region stood at approximately 23,300 RMB/ton—an increase of 100 RMB/ton from the previous week. Similarly, the benchmark spot price for 32S cotton ring-spun yarn was around 24,700 RMB/ton, also up 100 RMB/ton from the previous week.
Market Brief: Cotton yarn prices on the market generally remain stable, though a few spinning mills have raised their quotes—typically by around 100 RMB/ton. Currently, order volumes among spinning mills are diverging: large-scale mills maintain relatively stable order books, whereas small and medium-sized mills are seeing a decline in orders, consisting predominantly of short-term and small-batch contracts. As overall raw cotton costs have edged upward, profit margins for spinning mills have narrowed further, leading some mills to offer slight price concessions to secure deals. A "slack season" atmosphere is beginning to emerge in the market; although downstream enterprises are making inquiries, their willingness to purchase remains weak, resulting in sluggish follow-through on new orders. Currently, 40S cotton yarn is seeing relatively brisk sales, while other yarn varieties are experiencing a slight accumulation of inventory.
Imported Yarn: According to feedback from cotton yarn traders in Guangdong, Fujian, and the Jiangsu-Zhejiang region, quotes for cotton yarn from origins such as Vietnam, India, Pakistan, and Bangladesh have continued to rise over the past week or so. This trend is driven by rising international cotton prices, compounded by factors such as upward adjustments in energy costs. Although inquiries and shipments for open-end yarn and low-count ring-spun cotton yarn remain relatively subdued, foreign spinning mills have nonetheless raised their quotes to varying degrees, reflecting a strong bullish sentiment prevailing in the market. Operating Status: Following the holiday period, the operating rates of spinning mills have returned to normal levels. This week, the operating rates of most textile enterprises remained stable, with cotton yarn manufacturers maintaining steady production operations. According to statistics, as of May 14, the operating rate for cotton yarn enterprises stood at 69.82%, remaining unchanged from the previous period.
Inventory Status: A distinct "off-season" atmosphere prevails; shipment speeds have slowed, and order volumes have declined. Consequently, yarn mills are facing increased inventory pressure, with finished goods stocks at cotton yarn enterprises showing an uptick compared to the previous period. According to statistics, as of May 14, the inventory of finished cotton yarn stood at 30.57 days' worth of supply—a month-on-month increase of 0.75%.
Cost Aspects: This week, international cotton markets displayed strength; a bullish USDA report, coupled with persistent drought conditions in the U.S., drove up prices on the ICE U.S. cotton futures exchange. However, the domestic market struggled to keep pace with these gains, resulting in a noticeable decline in the weekly average price of domestic cotton. Meanwhile, cotton yarn prices remained stable, though processing fees for standard combed ring-spun C32S yarn saw an increase during the week. Statistics indicate that the weekly average processing fee for standard combed ring-spun C32S yarn reached 4,508—a month-on-month rise of 10.15%. As of May 14, the spot spinning margin for C32S ring-spun yarn among inland textile enterprises stood at -1,423.13 RMB/ton—a month-on-month decline of 123 RMB/ton.
Regarding demand: The market for greige fabric dyeing and printing has performed moderately in recent weeks; while inquiries have been numerous, actual order placement remains limited. Factory shipments are predominantly focused on coarse and heavy-weight fabrics. Driven by rising raw material costs, prices for both standard and custom-woven varieties have surged significantly, making it difficult for customers to finalize orders. Some factories have managed to shorten their lead times to approximately seven days; however, lacking the support of large-scale orders, they are currently facing a shortage of follow-up business. According to statistics, as of May 14, the average operating rate within the domestic cotton spinning and weaving sector stood at 46.60%, representing a month-on-month decline of 0.03%.
Market Outlook:
The current off-season is pronounced, with new orders remaining limited. Consequently, inventory pressure on textile enterprises is gradually mounting. Compounded by firm cotton prices, spinning margins for these firms remain under sustained pressure. In the short term, the market is expected to maintain a weak trajectory, and yarn prices may face a risk of downward adjustment; however, market participants should continue to closely monitor the price trends of Zhengzhou cotton futures.
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