Imported cotton yarn prices have surged in early May, driven by ICE cotton futures hitting a two-year high. Combined with rising energy costs and surging domestic cotton prices in India, FOB/CNF/CIF quotes from major producers like Vietnam, India, Pakistan, Uzbekistan, Malaysia, Indonesia, and Bangladesh have all increased. Even for slow-moving categories like open-end and low-count ring-spun yarn, mills remain firm on higher prices, reflecting a strong bullish sentiment.
Cost Push and Supply Tightening
The core driver of this price rally is cost-side pressure. The sustained rise in ICE cotton has directly raised the global pricing benchmark for cotton raw materials, while energy shortages and price hikes have further squeezed mill margins. In response, some mills in Vietnam, India, and Pakistan have temporarily suspended or slowed down quoting for forward shipments, particularly for "shipment" yarns. This suggests a potential tightening of USD-denominated yarn supply in the near term.
Port inventory data shows a slight decline over the past two weeks. While Vietnam and Indonesia's polyester-cotton yarns have seen decent spot sales, arrivals from India, Pakistan, and Uzbekistan have decreased compared to April. However, total port stocks remain significantly higher than the same period in 2022/23 to 2024/25, indicating no fundamental supply shortage but rather a structural adjustment.
Downstream Caution Amid Cost and Order Uncertainty
The rapid price hikes have put immense pressure on coastal weaving mills and traders. Feedback from a major Zhejiang-based textile import/export company reveals that downstream acceptance and digestion capacity are being severely tested. On one hand, rising raw material costs are squeezing weaving margins; on the other hand, growth in export orders to Europe and the US is slowing. Notably, since mid-April, US Customs has adjusted its verification methods for the Uyghur Forced Labor Prevention Act, increasing the number of inspections, with textile and apparel products accounting for a larger share. This has further heightened uncertainty for foreign trade companies.
Consequently, buyers are adopting a wait-and-see approach for both port-stocked and shipment yarns, limiting purchases to essential needs. This mentality has created a clear standoff between upstream price increases and downstream buying.
Short-Term Price Standoff, Two Key Variables Ahead
In summary, the imported cotton yarn market is entering a phase of intensified price negotiation. Upstream mills, backed by cost support, are unwilling to cut prices, while downstream users are balancing cost pressures with order risks. The market's next direction hinges on two variables: the future trajectory of ICE cotton futures—a correction could weaken upward price momentum—and the recovery of demand in Europe and the US, particularly the actual impact of the UFLPA enforcement.
For traders, managing inventory risk is now more critical than chasing price gains. Blindly following the uptrend could lead to cost inversions, while excessive caution might miss opportunistic replenishment windows.