The textile industry is in the middle of a restocking cycle rarely seen in nearly two decades. According to China Customs and National Bureau of Statistics public data, raw material inventories rose for a ninth consecutive month in August, marking the longest expansion since 2006-2007. At the same time, output grew for a ninth straight month, with August posting the fastest gain since May. Together, these two data points paint a contradictory picture: factories are optimistic about peak season, yet terminal prices are drifting lower.
Production: Off-Season Resilience, But Divergence Deepens
Loom utilization rates across Jiangsu, Zhejiang, Shandong, and Guangdong continued to recover in August. Greige and fabric mills accelerated production schedules, and capacity utilization steadily improved. This contrasts sharply with July's low-operation, weak-output pattern, and the resilience at the tail end of the off-season has exceeded market expectations.
Two forces drove this recovery. First, autumn-winter apparel and home textile orders landed earlier than usual, directly pulling upstream spinning and weaving volumes. Second, earlier equipment adjustments and capacity optimization began to pay off, improving supply capability. Yarn production-sales ratios rose month-on-month, and leading firms largely achieved production on demand.
But the expansion is not uniform. Terminal consumer goods firms have ample orders, while chemical fiber and industrial textile producers are trimming headcount. This divergence suggests the peak season recovery will be structural rather than broad-based.
Orders and Inventory: Backlogs Grow, Mismatch Persists
New order growth was August's clearest positive signal. Domestic and export orders recovered in tandem, with unfinished order volumes rising for a seventh consecutive month. August's backlog growth rate was the fastest since March. Real demand is recovering — that is no longer in dispute.
Yet the backlog also exposes a阶段性 supply-demand mismatch. During the earlier off-season, firms generally operated at low capacity and kept lean inventories. When autumn-winter restocking demand arrived in force, capacity could not match it quickly. Finished goods inventory growth hit its highest since September 2025, driven partly by proactive stockpiling and partly by scattered orders at smaller mills.
Raw material procurement, after a slight dip in July, surged in August to a four-month high. Restocking sentiment has warmed across the board, with sustained purchasing of cotton, polyester, and dyes. Supply chains remained stable, with delivery times roughly flat versus July and none of the source shortages or delays typical of past peak seasons.
Costs and Margins: Upstream Rises, Downstream Competes, Transmission Lags
Raw material input prices rose slightly in August for the first time since April, ending a period of steady decline. Crude oil and metal price volatility pushed up polyester and other chemical fiber feedstock costs, while spot cotton prices firmed and suppliers adjusted quotes. Comprehensive production costs edged higher, though the increase remained moderate.
What warrants real caution is terminal pricing. For the first time this year, finished textile product prices edged down. Small and mid-sized weaving and apparel firms rolled out promotions to capture peak-season share and clear existing inventory. With upstream costs rising and downstream prices under competitive pressure, price transmission lags significantly, compressing industry-wide profit margins.
Employment data reflects the same structural adjustment. Overall headcount was stable in August, with no mass hiring or layoffs. But apparel fabric and home textile firms continued adding frontline workers, while chemical fiber and industrial textile producers trimmed positions slightly. The traditional pattern of off-season shortages and peak-season hiring sprees has been replaced by more refined, structured workforce adjustments.
Outlook: No Broad Rally Expected for Golden September and Silver October
Taken together, August data shows a clear bottoming-out trend, creating favorable conditions for the traditional peak season. After September, autumn-winter terminal demand will be released in a concentrated manner, and domestic and export replenishment orders are expected to continue landing, driving further recovery across the supply chain.
However, structural problems cannot be ignored. Frequent raw material price swings, intense terminal competition, and thin corporate profits will not resolve automatically with the arrival of peak season. The current demand recovery is slow-paced, with order fragmentation a prominent feature. A broad rally for this year's Golden September and Silver October is unlikely; the recovery will be structural and differentiated. Key indicators to watch include cotton and crude oil price trends, terminal consumption recovery strength, and the pace of export order fulfillment.