Beijing [China] April 12 : Textile manufacturers across eastern China, particularly in Zhejiang province, are grappling with an intensifying crisis as soaring raw material prices coincide with shrinking demand, pushing many factories toward possible closure, as reported by The Epoch Times.
According to The Epoch Times, the cost of essential textile inputs has surged dramatically in recent weeks, doubling in some cases.
This sharp rise has left producers operating at a loss, with one industry insider noting that materials previously costing 1 million yuan now require double that amount.
Manufacturers say increased production only deepens their financial losses.
The crisis has been exacerbated by global geopolitical disruptions. The ongoing Iran conflict and the resulting closure of the Strait of Hormuz have severely affected energy markets.
Since February, shipping interruptions through this key route have driven up oil prices, directly impacting petrochemical-based textile inputs such as purified terephthalic acid, ethylene glycol, and polyester fibre.
A trader in Huzhou stated that the Middle East turmoil is having an immediate and unavoidable impact on China's textile industry.
Factories now find themselves trapped between escalating upstream costs and resistant downstream buyers unwilling to accept price hikes.
This imbalance has created a severe "middle squeeze," leaving many businesses unable to sustain operations.
Reports indicate that some companies have only weeks of inventory left and are considering halting production by mid-April.
Zhejiang's textile sector, heavily reliant on small and medium enterprises, is particularly vulnerable due to its thin profit margins and exposure to price volatility, as cited by The Epoch Times.
Manufacturers are hesitant to purchase expensive raw materials or accept new orders amid logistical uncertainties and fluctuating costs.
Some have even found it more profitable to resell raw materials than to produce finished goods.
The ongoing turmoil is also accelerating a broader shift in global supply chains, with garment production increasingly relocating to countries like Vietnam, as reported by The Epoch Times.