Raw material prices are climbing steadily, but fabric prices are retreating in reverse—the latest Keqiao Textile Index paints an intriguing scissors gap. The raw material sub-index reached 94.40 points, up 0.18% month-on-month, while the overall textile price index fell to 106.68 points, down 0.25%. Between these two movements lies a quiet reshaping of profit distribution across the supply chain.
Cost Pass-Through Failure and Margin Squeeze
The polyester chain is the main driver of this round of raw material increases. Rising PTA and ethylene glycol prices have pushed up polyester yarn quotations, with most transactions negotiated individually. The cotton yarn market also saw modest gains, with 32S combed yarn maintaining around 25,100 yuan per ton, supported by high cotton prices. However, the upstream price hikes are not passing through smoothly to fabric end-products. Greige fabric and apparel fabric transactions have contracted, with prices weakening simultaneously, meaning weaving and fabric mills are bearing the brunt of cost pressures.
More notably, viscose yarn prices are weak, with a strong wait-and-see atmosphere, indicating internal divergence in the yarn market. This reflects cautious downstream purchasing, with rare large-scale stockpiling and a lack of momentum to chase price increases. For spinners, raw material hikes can be partially passed on; but fabric mills are caught between rising yarn prices and downstream brand budgets, with pricing power squeezed from both sides. Intermediate margins are being eroded, and resistance to cost pass-through is growing.
Structural Recovery and Differentiation Strategy
The golden September period did not bring an all-around boom; the market shows clear structural characteristics. Greige fabric prices and volumes fell month-on-month, and apparel fabric categories diverged sharply: wool blends and specialty differentiated chemical fiber fabrics saw robust inquiries and orders, while plain cotton and ordinary polyester-cotton commodity fabrics traded sluggishly. Autumn/winter demand is driving interest in thick blends, micro-textured, and lightweight functional fabrics. Domestic women's wear brands and e-commerce clients are placing small-batch, quick-response orders, with large orders shrinking significantly.
Home textile operations remain stable, and foreign trade orders are recovering somewhat, but overseas buyers are highly sensitive to raw material fluctuations and strict on pricing. Homogeneous white greige fabrics are caught in low-price competition with thin margins; in contrast, differentiated fabrics with unique textures or special blend ratios command stronger pricing power, becoming an important tool for merchants to hedge cost risks. This divergence is not a short-term phenomenon but a result of demand upgrading combined with supply oversupply.
Strategic Shifts and Future Outlook for Keqiao Enterprises
Facing frequent raw material fluctuations and fragmented orders, Keqiao enterprises are abandoning the old model of volume-driven plain greige sales in favor of multi-dimensional upgrades. On the raw material front, they adopt batch-wise price-locking procurement strategies to avoid inventory risks from sharp price swings; they also strengthen collaboration with upstream yarn mills, prioritizing differentiated blended yarns to solidify product competitiveness from the source. On the product front, they push R&D forward, displaying yarn samples and finished garment prototypes in showrooms to offer complete fabric solutions. They accelerate product iteration cycles and shorten sampling lead times to adapt to brands' small-order, quick-response needs; meanwhile, they balance traditional foreign trade and cross-border e-commerce channels to diversify market risk.
The core of these strategies is converting sampling and delivery efficiency into core competitiveness. The key variables for the future remain raw material prices and end-consumer demand. If polyester raw materials stay high, fabric mills' cost pressures will persist; only with sustained autumn/winter consumption and brand replenishment can the fabric market open further growth space. The industry is likely to continue a structural trend, with increasing pressure on commodity categories, while companies with differentiated products and rapid response capabilities will see their advantages grow.