Rising costs and Middle East tensions squeeze China’s textile sector

China’s textile industry, particularly in Zhejiang province, is facing mounting pressure as soaring raw material costs and weak demand push many manufacturers toward potential shutdowns.

According to The Epoch Times, prices of key textile inputs have surged sharply in recent weeks, in some cases doubling. This has left factories operating at a loss, with higher production volumes only increasing financial strain.The crisis is being driven in part by geopolitical disruptions linked to tensions around Strait of Hormuz. Shipping interruptions through this vital route have pushed up oil prices, raising costs for petrochemical-based inputs such as polyester fiber, purified terephthalic acid, and ethylene glycol.

Manufacturers are now caught in a “middle squeeze,” as rising upstream costs clash with buyers unwilling to accept higher prices. Many firms are hesitant to procure raw materials or take new orders due to uncertainty and volatile pricing.

With limited inventory and tightening margins, some factories are considering halting production within weeks. The situation is especially critical for small and medium enterprises in Zhejiang, which operate on thin margins.