According to the commodity market analysis system of Shengyi Society, the cotton yarn market continued to be sluggish this week, with prices temporarily stable. Currently, yarn mills have no profits, and orders are being executed on a case by case basis, resulting in an overall market stalemate. As of January 3rd, the reference spot price for 21S pure cotton ring spinning in Shandong Province, China is around 22565 yuan/ton, unchanged from last week; The spot reference price for 32S pure cotton ring spinning is 24075 yuan/ton, unchanged from last week.
Market Overview: As the end of the year approaches, the market’s stocking mentality is not good, and lowering prices does not significantly stimulate downstream shipments. Some textile companies have reported increased difficulty in shipping. The price of cotton yarn is temporarily stable, and the market continues to be sluggish. Currently, yarn mills have no profit and are resistant to price reductions. Order execution is a matter of negotiation, and traders are mainly watching and waiting for large yarn mills to sell their goods and build warehouses before the holiday. The overall market is in a stalemate.
Decline in start-up: Due to increased sales pressure, large-scale yarn mills have maintained stable start-up, while some small and medium-sized yarn mills have continued to reduce start-up or shut down for holidays. As of January 2, the start-up load of mainstream textile enterprises was 60.2%, a month on month decrease of 3.53%. It is expected that the number of companies shutting down next week will continue to increase, while the number of startups will still slightly decrease.
Finished product inventory: The increase in finished product inventory of textile enterprises slowed down this week, and market shipments remained stable. Some enterprises stopped selling their inventory, resulting in a slight decrease in inventory. As of January 2, the yarn inventory of textile enterprises in major regions was 35.5 days, with a week on week increase of 0.09%. As the Spring Festival approaches, some manufacturers have announced that they will take early holidays, and it is expected that inventory will decrease next week.
In terms of raw materials: Zheng cotton slightly rose this week, and there has been no clear guidance in the market recently. The upward trend in the market is mainly manifested by short positions taking profits and leaving. In terms of spot goods, as the Spring Festival approaches, downstream textile companies have planned to shut down one after another, resulting in a significant reduction in stocking volume and market transactions. As most cotton mills come to an end, the daily processing volume has decreased, and cotton supply this year is relatively loose. It is expected that the cotton market will fluctuate weakly next week.
On the demand side: According to feedback from Shandong, Hebei, Jiangsu and other places, as downstream autumn and winter fabric sales turn from strong to weak, the operating rate of some textile factories in coastal areas continues to decline (a few textile factories have started production restrictions/reductions and the Spring Festival holiday mode). Although the yarn inventory of distributors is low, they have entered a “shutdown” state ahead of schedule due to the increase in export/domestic sales variables of cotton textiles and clothing in the first half of 2025, and the entire fabric consumption terminal has fallen into a “stagnant pool”.
Market forecast: In summary, the off-season in the cotton spinning market is gradually deepening, downstream orders are increasing less, textile companies are shipping slowly, production is decreasing, inventory is increasing, and the prices of conventional varieties are rolling inward, resulting in meager profits for textile companies. In addition, upstream cotton inventory is slightly loose compared to the same period. Due to general terminal demand, some textile companies have early holiday plans. It is expected that textile companies will sell goods at low prices to recoup funds. In the short term, they will face insufficient price incentives, and yarn prices will continue to be under pressure. It is expected that large textile enterprises will continue to lower prices and sell goods near the Spring Festival, with a focus on the impact of terminal consumption and macroeconomic dynamics on the market.
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