Upstream raw material and energy prices continue to rise, while factory-gate prices for textiles and apparel are falling—June 2026 PPI data from the National Bureau of Statistics once again confirms the difficult position of the textile industry, squeezed from both ends.
Price Scissors: Upstream Hot, Downstream Cold
In June, China's Producer Price Index (PPI) rose 4.1% year-on-year, but this increase was almost entirely driven by production materials. Production material prices surged 5.5% year-on-year, with the mining industry up 16.5%, raw materials up 8.6%, and processing industries up 3.0%.
In stark contrast, consumer goods prices fell 0.9% year-on-year, and apparel factory-gate prices dropped 1.0%. This means textile and garment enterprises face rising production costs but cannot obtain sufficient price compensation at the finished product end.
From the procurement side, cost pressure is even more intuitive. The purchase price of textile raw materials rose 3.3% year-on-year and 0.7% month-on-month; chemical raw materials surged 11.5%; and fuel and power rose 11.8%. These three cost items increased simultaneously, directly raising expenses for weaving, dyeing, and drying processes.
Why Is Cost Transmission Stuck?
The core reason for poor downstream transmission of upstream costs lies in the competitive landscape of the end market. Markets for apparel, home textiles, and footwear are well-supplied, with brands and retailers holding pricing power, leaving manufacturers with little bargaining power to pass on raw material and energy price increases.
Meanwhile, international commodity prices remain high, especially crude oil and non-ferrous metals, which are transmitted through chemical and chemical fiber supply chains to textile enterprises. During the peak summer season, coal and electricity demand rises, further pushing up energy costs. Additionally, the expansion of computing power, new energy, and energy storage industries has boosted demand for non-ferrous metals and some chemicals, indirectly raising costs for textile chemical supporting materials.
This price scissors of 'upstream rising, downstream falling' directly compresses profit margins in chemical fiber, spinning, printing and dyeing, and footwear manufacturing. Companies relying solely on order volume to maintain operations will see profits steadily eroded.
Industrial Cluster Response: From Passive Pressure to Active Change
Faced with cost pressure, different industrial clusters show differentiated response strategies. Chemical fiber clusters like Shaoxing and Xiaoshan are accelerating transformation to differentiated functional fibers, increasing product added value to absorb raw material price increases. Cotton textile hubs like Nantong and Gaoyang focus more on process cost reduction and energy efficiency management, with some companies introducing digital monitoring systems to reduce unit energy consumption.
The printing and dyeing sector is one of the most concentrated areas of cost pressure. Rising chemical raw material prices for dyes and auxiliaries, combined with increased energy costs for steam and electricity, put many small and medium-sized dyeing factories at risk of losses. Some companies are turning to high-value-added functional finishes such as waterproofing, antibacterial, and flame-retardant treatments to boost product prices.