Data released by the National Bureau of Statistics on July 9 revealed an uncomfortable reality for the textile industry: upstream raw material and energy costs continue to climb, while downstream factory gate prices are weakening, squeezing profit margins from both ends.
Upstream Costs Surge Across the Board
Procurement-side data directly reflects the source of cost pressure. Textile raw material procurement prices rose 3.3% year-on-year, with costs for chemical fibers, cotton, and recycled fiber raw materials continuing to increase. Chemical raw material procurement prices surged 11.5% year-on-year, directly driving up production costs for polyester, nylon, and auxiliaries. Fuel and power procurement prices increased 11.8% year-on-year, significantly raising energy costs for weaving, dyeing, and drying processes.
The simultaneous rise of these three major cost categories means textile manufacturers are facing a comprehensive restructuring of their cost base. Whether cotton spinning, chemical fiber, or printing and dyeing, all enterprises are caught between rising raw material and energy costs.
Weak Downstream Pricing
Pressure from the production side has not transmitted to the consumer end. Consumer goods prices overall fell 0.9% year-on-year, with apparel factory gate prices down 1.0%. The synchronized decline in apparel and home textile ex-factory prices indicates intense competition in the end market, leaving companies with little room to raise prices.
This pattern of 'upstream price increases, downstream price decreases' is particularly pronounced in the textile industry. Producer goods prices rose 5.5% year-on-year, the core driver of PPI growth, while consumer goods prices declined. Textile and garment enterprises, positioned in the middle of the supply chain, can neither control upstream raw material costs nor pass on pressures downstream, making them one of the segments most severely squeezed.
Reasons Behind Price Divergence
High international commodity prices are the root cause of rising costs. Sustained strength in global energy and non-ferrous metal prices has pushed up costs for basic chemical and fiber raw materials. Meanwhile, rapid development of computing power, new energy, and energy storage industries has driven demand for non-ferrous metals and electrical materials, further intensifying upstream price pressures.
The summer peak energy demand season has also elevated coal and electricity costs. These external factors make it unlikely for textile enterprises' energy costs to fall in the short term.
On the terminal market side, ample supply in the apparel and footwear industries gives brands and retailers strong control over factory gate prices. Against a backdrop of moderate consumption recovery, downstream companies prefer maintaining low-price strategies to protect market share rather than proactively raising prices.
Practical Impact on Enterprises
For segments such as chemical fiber, spinning, printing and dyeing, and footwear, profit margins are being systematically compressed. In the short term, companies can only rely on order volume to dilute fixed costs or optimize processes and energy management to reduce unit energy consumption. But such measures have limited scope and are difficult to sustain.
Over the medium to long term, the industry is accelerating its shift toward green and low-carbon processes, differentiated functional fabrics, and high-end specialty fiber products. Only through high value-added products can companies establish pricing power and break free from passive dependence on costs and scale.