Summary:
China's fiber markets face shifting dynamics: cotton grapples with oversupply (inventories at 5.5M tons) and widening price gaps (domestic vs. global), while synthetic fibers see export growth (+16.9% polyester) amid price volatility. Wool and silk struggle with import reliance (60% wool from Australia/NZ) and weak demand. Trade barriers—U.S. 125% cotton tariffs, EU spandex levies—disrupt exports, while Brazil's logistics snags cut cotton shipments to China. Rising synthetic capacity (polyester >60% global share) and substitution tech (insect protein, low-protein feed) add competitive pressures. Global fiber markets face dual challenges: trade tensions and innovation-driven disruptions, with Asia driving demand amid supply imbalances.
1. Cotton: Domestic Oversupply vs. Intensifying Global Competition
Prices & Inventories
• Domestic Prices: China Cotton Index (CCIndex 3128B) closed at 14,690 yuan/ton on April 19, down 0.27% month-on-month (MoM) and 13% year-on-year (YoY). Xinjiang cotton spot prices ranged from 14,500–14,800 yuan/ton, while inland cotton traded lower (14,300–14,600 yuan/ton) due to weak demand.
• Inventory Pressure: National commercial cotton inventories reached 5.515 million tons by February-end (+1.48 million tons YoY), with industrial inventories at 931,000 tons (+43,000 tons YoY).
• Global Prices: Cotlook A Index stood at 78 cents/lb on April 19, translating to 13,813 yuan/ton under 1% tariff—1,086 yuan below domestic prices, widening the price gap.
Supply Chain & Production
• Xinjiang Planting Progress: As of April 14, 62.3% of cotton fields were sown in Xinjiang, matching 2023 levels, with full sowing expected by mid-May.
• Capacity Expansion: Xinjiang's cotton textile spindles exceeded 26 million, with 40% of local cotton processed domestically. China's 2024/25 cotton output is forecast to rise 13.4% YoY to 6.664 million tons.
Trade Dynamics
• Imports Decline: Cotton imports fell 60.9% YoY to 120,000 tons in Jan-Feb 2025, with Brazilian cotton accounting for 58.5%, while U.S. cotton imports collapsed due to 125% tariffs.
• Export Slump: Textile and apparel exports dropped 26.4% YoY to $12.94 billion in February, with cotton apparel exports down 33% YoY to $1.11 billion.
2. Synthetic Fiber: Export Growth Amid Price Divergence
Polyester Fiber
• Prices: Flame-retardant cationic-dyeable polyester fiber traded at 23,000 yuan/ton on April 18, while 150D low-elastic yarn fell 5% MoM to 15.90 yuan/kg.
• Exports: Polyester exports surged 16.9% YoY to 2.108 million tons in Jan-Feb 2025, driven by bottle chips (+17.5% to 909,000 tons) and staple fiber (+38.7% to 234,000 tons).
• Feedstock: PTA exports rose 14.9% YoY to 655,000 tons, while ethylene glycol imports jumped 37.5% YoY to 1.271 million tons, ensuring ample raw material supply.
Spandex
• Price Volatility: Spandex benchmark price dropped 1.8% to 24,550 yuan/ton by April 14, with 40D grades quoted at 23,000–25,000 yuan/ton amid weak downstream demand.
• Capacity Adjustments: EU tariffs forced producers like Meihua Biological to cut 100,000-ton capacity, lengthening industry inventory cycles to 1–2 months.
3. Wool & Silk: Import Substitution and Price Divergence
Wool
• Domestic Prices: Wool spot prices averaged 127.5 yuan/jin on April 19, while Tibetan cashmere fell 8% YoY to 100,000 yuan/jin.
• Import Reliance: China imports over 60% of its wool from Australia and New Zealand, with Jan-Feb 2025 imports down 14.2% YoY.
Silk
• Prices & Demand: Silk prices ranged from 85–90 yuan/jin on April 21, with upward pressure due to tightening supply, despite a 7.5% YoY drop in silk exports.
• Inventory Stress: Silk inventories rose 12% YoY in 2024, pushing some firms to explore Southeast Asian markets, though orders remain sparse.
4. Global Market Trends
• U.S. Cotton: USDA data shows 5% of 2025 U.S. cotton area planted (flat YoY), with exports revised down to 13.1 million bales amid Brazilian competition and tariffs.
• Brazilian Cotton: 2024/25 output is projected at 12.47 million tons, but exports may slump to 34 million tons (4-year low) due to logistics bottlenecks, cutting China-bound shipments by 37% YoY.
• Synthetic Fiber: Global market size is forecast to grow 9.2% YoY to $212.13 billion in 2025, led by polyester (＞60% share) and Asian demand.
5. Key Challenges & Trends
• Supply-Demand Imbalance: High cotton inventories (5.515 million tons) and synthetic fiber overcapacity drive price pressures.
• Tariff Impacts: U.S. 125% tariffs on Chinese cotton and EU levies on lysine disrupt export flows.
• Substitution Tech: Low-protein feed adoption reduces soybean meal demand, while insect protein R&D challenges traditional fiber markets.
Data Sources: China Cotton Association, General Administration of Customs, CCM
More information can be found at CCM fibers China Monthly Report.
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