When raw material price indices rise against falling fabric prices, Keqiao Textile City's divergence in the traditional peak season cannot be dismissed as mere seasonal fluctuation. It signals a shift in pricing power away from fabric makers, as industry profits migrate upstream toward raw material suppliers.
Data Behind the Profit Migration
The latest Keqiao Textile Index shows the overall textile price index fell 0.25% month-on-month to 106.68 points, while the raw material sub-index rose 0.18% to 94.40 points. This divergence reflects a reshuffling of profit distribution along the supply chain. Rising PTA and ethylene glycol prices pushed up polyester yarn quotations, while cotton yarn edged higher on firm cotton costs, with 32S combed yarn hovering around RMB 25,100 per ton.
However, these upstream increases have not effectively transmitted to fabric prices. Greige fabric and apparel fabric transactions both contracted, with prices under pressure. Consequently, cost burdens from raw material hikes are largely absorbed by weaving and finishing stages, failing to pass through to brand clients. For Keqiao mills, the widening gap between rising input costs and stagnant fabric prices is eroding already-thin processing margins.
Fragmented Orders Force Operational Shifts
Parallel to cost pressures is a notable change in order structures. This September lacks traditional bulk orders, replaced by fragmented, small-lot, and frequent replenishment patterns. Domestic women's wear brands and e-commerce clients favor trial orders with small quantities, followed by repeat orders based on market feedback. This model demands exceptional quick-response capabilities, making sampling cycles and delivery efficiency core competitive factors.
Market divergence is stark. Differentiated fabrics such as wool blends, subtle textures, and lightweight functional materials see active inquiries and sales, while plain cotton and ordinary polyester-cotton staples trade sluggishly. Homogeneous greige fabrics are trapped in price wars. This unevenness reveals upgraded downstream demand: brands no longer settle for standardized supply but seek differentiated products—unique textures, special blends, or functional properties—and are willing to pay premiums.
Keqiao Enterprises' Strategies and Outlook
Facing volatile raw material prices and fragmented orders, Keqiao mills are adjusting strategies across multiple fronts. In procurement, batch-wise price locking mitigates inventory risks. In product development, they front-load R&D, displaying yarn samples alongside finished fabric swatches to offer complete solutions. In channel management, they balance traditional foreign trade with cross-border e-commerce to diversify market risks. These measures fundamentally shift from a production-oriented to a customer-centric service approach.
Future trends hinge on raw material price trajectories and end-consumer demand. If polyester feedstock remains high, fabric makers' cost pressures will persist; only sustained autumn/winter consumption and brand reorders can open new growth avenues. The market will likely continue its structural pattern, squeezing homogeneous products while amplifying advantages for firms with differentiated product development and rapid response capabilities.