Global Yarn Raw Materials Market Faces Supply-Demand Imbalance Amid Trade Restructuring

Global Yarn Raw Materials Market Faces Supply-Demand Imbalance Amid Trade Restructuring

May 18, 2026​ – The global yarn raw materials market is navigating a complex landscape of supply-demand imbalances and trade policy shifts. Cotton, wool, and chemical fibers each face distinct challenges as the textile industry adapts to changing geopolitical and economic conditions.

Cotton: Oversupply and Price Divergence

Global cotton markets experienced a "wide fluctuations, internal-external divergence" pattern in 2025

International cotton prices trended downward overall, with the Cotlook A index dropping 7% from the beginning of the year to 74 cents/pound by December 2025

 

This decline reflects abundant global supply and weak demand, with the International Cotton Advisory Committee projecting global cotton production at 25.4 million tons for 2025/26, exceeding consumption of 25 million tons

 

China's cotton production reached a record high since 2009 at 6.641 million tons in 2025, representing a 7.7% year-on-year increase

 However, cotton imports plummeted 64% during January-November 2025 to 890,000 tons, the lowest in nine years

This import decline, coupled with China's domestic production growth, has created significant price divergence between domestic and international markets.

Wool: Production Declines and Market Restructuring

Major wool-producing regions face production challenges. Australia's wool output has declined over nearly 20 years, with further reductions expected in 2025 primarily due to drought conditions

 

. South Africa projects a 2% decrease in wool production for the 2025/26 season

 

. China's wool textile industry accounts for only 2.75% of the total textile industry output value in 2025

 

Wool prices showed signs of recovery in late 2025, with rational increases of approximately 30 cents per week

 

. However, market restructuring is evident as traditional worsted fabric demand decreases while outdoor sports applications expand

. Notably, products with only 5% wool content can now be labeled as "wool products," reducing overall wool consumption despite increased garment production

 

Chemical Fibers: Price Declines and Export Growth

Chemical fiber markets faced widespread price declines in 2025. Key products including nylon, spandex, and polyester experienced price drops ranging from 2% to 26%. The chemical fiber industry's operating revenue decreased by 7.31% year-on-year, though profit margins showed improvement with a 4.46% decline in total profits

Despite domestic challenges, chemical fiber exports demonstrated resilience. January-June 2025 saw chemical fiber product exports reach 3.45 million tons, a 14.73% year-on-year increase. This export growth has become a crucial support for industry stability

Trade Dynamics: Supply Chain Restructuring

Global textile trade patterns are undergoing significant transformation. Vietnam surpassed China to become the United States' largest apparel supplier in 2025, capturing 17.71% market share compared to China's 16.96%

. This shift reflects American buyers diversifying procurement to Southeast and South Asia in response to tariff pressures and geopolitical considerations.

Despite this downstream relocation, China maintains its position as a key raw material supplier. Chinese yarn exports to ASEAN and three South Asian countries (India, Pakistan, Bangladesh) grew over 20% during January-September 2025

. China supplies approximately 80% of Vietnam's yarn imports

, demonstrating deep integration within Asian textile supply chains.

Future Outlook: Balancing Challenges and Opportunities

The yarn raw materials sector faces continued uncertainty in 2026. Cotton markets may transition from oversupply toward rebalancing as production adjustments occur in major growing regions

. Wool markets must navigate between production constraints and evolving consumption patterns. Chemical fiber producers will continue balancing price pressures with export opportunities.

Industry adaptation to trade policy changes, sustainability requirements, and shifting consumption patterns will determine success in the evolving global textile landscape. As supply chains regionalize and environmental considerations gain prominence, raw material suppliers must innovate to maintain competitiveness in an increasingly complex market environment.