Data released by the National Bureau of Statistics for June 2026 reveals a stark reality for the textile industry: upstream raw material prices continue to climb while downstream finished product prices weaken. Behind the 4.1% year-on-year PPI increase lies a deep divergence in profit distribution across the textile supply chain.
Price Scissors: Upstream Surges, Downstream Struggles
In June, production material prices rose 5.5% year-on-year, with mining industry prices surging 16.5% and raw material industry prices up 8.6%, driving the overall PPI increase. High prices of commodities like fuels, chemicals, and non-ferrous metals directly pushed up textile companies' procurement costs. Textile raw material purchase prices increased 3.3% year-on-year, with a further 0.7% month-on-month rise, as costs for chemical fibers, cotton, and recycled fibers continued to climb. Chemical raw material purchase prices surged 11.5% year-on-year, putting particular pressure on polyester, nylon, and auxiliaries. Fuel and power purchase prices rose 11.8% year-on-year, further increasing energy costs for weaving, dyeing, and drying processes.
In stark contrast, consumer goods prices overall fell 0.9% year-on-year, with apparel factory prices down 1.0%. Intense competition in the end-market for clothing and home textiles makes it difficult for companies to pass on cost increases to consumers. This pattern of rising upstream costs and falling downstream prices leaves textile manufacturers as the most squeezed link in the chain. In the first half of the year, cumulative PPI rose 1.5%, while purchase prices increased 2.4%, maintaining a persistent gap.
Failed Cost Pass-Through: The Textile Company Dilemma
For textile companies, raw material and energy costs typically account for over 60% of total production costs. When inputs like cotton, chemical fibers, dyes, and electricity rise simultaneously, the cost pressure is systemic. However, ample supply in the end-consumer market and fierce competition in apparel and footwear make brands and retailers highly sensitive to price increases. Forcing a price hike risks losing orders, while absorbing costs compresses margins.
This dilemma is particularly acute in segments like chemical fibers, spinning, printing and dyeing, and shoemaking. For example, in the chemical fiber sector, upstream raw material prices for PTA and MEG fluctuate significantly due to international oil and chemical markets, but downstream weaving and garment companies can only accept limited price adjustments. The dyeing sector faces similar challenges, with rising costs for dyes and auxiliaries but limited ability to raise processing fees.
Industrial Cluster Responses: From Passivity to Proactive Change
Faced with cost pressure, different industrial clusters are adopting varied strategies. In traditional textile clusters like Keqiao in Shaoxing and Shengze in Wujiang, some companies are offsetting cost pressure by increasing product value, such as developing differentiated functional fabrics and high-end specialty fibers. The Nantong home textile cluster focuses more on process cost reduction and supply chain optimization through digital transformation to reduce energy and material waste.
In the medium to long term, the industry is accelerating the adoption of green, low-carbon processes and smart manufacturing. Adopting low-energy dyeing technologies, promoting recycled fiber raw materials, and optimizing production scheduling—while requiring significant upfront investment—can effectively reduce per-unit energy and raw material consumption, thereby mitigating the impact of cost volatility.