The rapid increase in cotton prices this year has led to a widening of the price gap between cotton and PSF (Polyester Staple Fiber) and VSF (Viscose Staple Fiber). This trend was particularly noticeable in April and July, when the price differences experienced significant expansion. 

However, cotton prices have been undergoing adjustments in August, causing the price gap with other fibers to stabilize somewhat. Despite this stabilization, the price difference remains above the average value, serving as a catalyst for shifts in the fiber market.

The chart in the image shows the relatively consistent price difference between VSF and PSF, which has recently shown a minor narrowing. Similarly, the price difference between cotton and other fibers remains relatively stable. Although there has been a slight recent narrowing in this price difference, it still remains higher than the average level.

The second image shows a clear shift away from cotton to other fibers during the latter half of 2021 and the first half of 2022. This trend persisted for about a year. From late May 2023, the price difference between cotton and other fibers has been gradually widening, surpassing the five-year average and persisting for three months. In terms of the short-term trajectory of cotton, PSF, and VSF, this price difference is likely to continue for a certain duration. Whether it will further increase depends closely on cotton prices.

From the standpoint of downstream profits, various types of yarn such as cotton yarn, polyester yarn, rayon yarn, and major blended yarns are all experiencing unfavorable profitability. 

Among these, cotton yarn is facing the most significant losses, followed by polyester/cotton yarn. Yarns with a substantial cotton component are all encountering adverse profitability, discouraging manufacturers from shifting their production. However, the inclination towards substitution is observed when considering downstream pressures and the need for cost reduction.