The textile industry is experiencing a silent profit squeeze. According to the latest June 2026 PPI data from the National Bureau of Statistics, upstream raw material purchase prices surged year-on-year while downstream finished product ex-factory prices declined, leaving manufacturers caught in the middle.
Cost Side: Chemical and Energy Dual Drive Pushes Textile Raw Material Costs to New Highs The data clearly outlines the cost pressure transmission path. In June, textile raw material purchase prices rose 3.3% year-on-year and 0.7% month-on-month, indicating the cost increase is not a short-term fluctuation. More alarmingly, chemical raw material purchase prices surged 11.5% year-on-year, while fuel and power purchase prices rose 11.8%. These two items directly correspond to the textile industry's core expenditures: chemical fiber raw materials and energy consumption.
For polyester, nylon, and other chemical fiber producers, basic chemical raw materials like PTA and caprolactam account for a large share of costs. An 11.5% increase means costs rise by hundreds of yuan per ton. For weaving and dyeing sectors, electricity, steam, and natural gas account for 15%-20% of production costs. An 11.8% increase means energy costs per 10,000 meters of fabric rise by thousands of yuan. Industry data shows this dual-drive cost increase has pushed comprehensive textile manufacturing costs up by 4%-6% cumulatively in the first half of 2026.
Output Side: Apparel Prices Continue to Weaken, Terminal Market Pass-Through Mechanism Fails In stark contrast to the booming upstream, the downstream market is chilling. In June, consumer goods prices fell 0.9% year-on-year, with apparel ex-factory prices down 1.0%. This means textile companies cannot pass on rising costs downstream but are forced to cut prices.
This price inversion stems from structural oversupply in the terminal market. Apparel and home textile categories have ample supply, with brands and retailers holding pricing power. Manufacturers lack bargaining power. Under the dominance of e-commerce channels, price transparency is extremely high, and any price increase could directly lead to order loss. A weaving factory owner in Keqiao, Shaoxing, said domestic orders in the first half of this year had unit prices 5%-8% lower year-on-year, but raw material costs were nearly 10% higher.
Profit Squeeze: Profit Margins Narrow Across the Chain from Chemical Fiber to Weaving The PPI divergence directly reflects in profit statements across the chain. Upstream mining prices rose 16.5% year-on-year, raw material processing rose 8.6%, but processing industry only rose 3.0%. This gradient from extraction to processing clearly shows profits concentrating at the upstream resource end.
For textile manufacturing, especially chemical fiber spinning, weaving, and dyeing, the situation is more severe. The chemical fiber sector faces dual pressure from rising chemical raw materials and price cuts from downstream weaving mills. The dyeing sector faces rising dye and auxiliary prices but difficulty raising processing fees. Industry data shows the profit margin of textile enterprises above designated size fell from 4.2% in the same period last year to about 3.5% in the first half of 2026, with some small and medium weaving factories already in losses.
Industry Response: Companies Forced to Adopt 'Cost Reduction + Differentiation' Dual Strategy Facing cost pressure, textile companies are not without options. Feedback from major industrial clusters like Shengze, Keqiao, and Nantong shows clear strategic divergence. Some companies choose the 'cost reduction path' through lean production and smart manufacturing to reduce unit energy and labor costs. Others turn to the 'differentiation path', increasing investment in recycled fibers, functional fabrics, and high-end specialty yarns to offset cost pressure with higher value-added products.
Notably, high chemical raw material prices are also forcing industrial chain restructuring. Some large chemical fiber companies are extending upstream to produce PTA and MEG for internal cost hedging, while small and medium enterprises rely more on joint procurement and long-term price agreements to control raw material volatility.