Beijing, April 12 (ANI): Textile manufacturers across eastern China, particularly in Zhejiang province, are facing an intensifying crisis as soaring raw material costs combine with weakening demand, pushing many factories toward potential closure, according to The Epoch Times.
The report said the cost of essential textile inputs has surged sharply in recent weeks, in some cases doubling. This increase has forced producers, to operate at a loss, with industry insiders noting that materials previously costing 1 million yuan now require nearly twice that amount.
Manufacturers say that increasing production only deepens their financial losses.
The crisis has been further exacerbated by global geopolitical disruptions. The ongoing Iran conflict and the closure of the Strait of Hormuz have significantly impacted energy markets.
Since February, shipping disruptions through the key route have driven up oil prices, directly affecting petrochemical-based textile inputs such as purified terephthalic acid, ethylene glycol, and polyester fiber.
A trader in Huzhou said the turmoil in the Middle East is having an immediate and unavoidable impact on China’s textile industry.
Factories are now caught between rising upstream costs and downstream buyers unwilling to accept higher prices. This imbalance has created what industry participants describe as a severe “middle squeeze,” leaving many businesses struggling to remain operational.
Reports indicate that some companies have only weeks of inventory remaining and are considering halting production by mid-April.
Zhejiang’s textile sector, which relies heavily on small and medium-sized enterprises, is particularly vulnerable due to thin profit margins and exposure to price volatility, the report noted.
Manufacturers are increasingly hesitant to purchase high-cost raw materials or accept new orders amid logistical uncertainties and fluctuating expenses. Some have found it more profitable to resell raw materials rather than produce finished goods.
The ongoing disruption is also accelerating a broader shift in global supply chains, with garment production increasingly moving to countries such as Vietnam, according to The Epoch Times. (ANI)
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