Since the U.S. and Israel launched military strikes on Iran on February 28, the Middle East situation has remained volatile, global crude oil markets have fluctuated sharply, and textile fabric exporters in the Yangtze River Delta have endured a stress test lasting more than half a year. From January to August, China's cumulative textile and apparel exports reached $203.37 billion, up 3.1% year-on-year, but growth has slowed from double digits at the start of the year to single digits, with fabric export value falling 1.5% in August. Companies in Keqiao and Shengze, the two major fabric export hubs, reported that sharp raw material price swings, chaotic shipping logistics, and wait-and-see sentiment among overseas customers constituted the main challenges.

Key Points

  • Within 10 days after the conflict broke out in late February, spot PTA prices soared by 1,500 yuan/ton, a rise of nearly 20%; in early October, the Persian Gulf-Red Sea route freight index stood at 4,068.55 points, about twice that of the Europe route.
  • In July, the comprehensive operating rate of chemical fiber weaving in Keqiao and Shengze fell to 51.68%, down more than 16 percentage points from the May peak; dyeing plants operated at only 40-50% capacity.
  • From January to August, textile and apparel exports to Belt and Road partner countries totaled $111.77 billion, accounting for 55% of the total and becoming the main growth driver.

Raw Materials: Price Rollercoaster Erodes Profits
PTA (purified terephthalic acid) is the core raw material for polyester and other chemical fibers, derived from petroleum refining. After the conflict erupted, spot PTA prices surged by 1,500 yuan/ton within 10 days, then fluctuated at high levels for an extended period, with single-day swings exceeding 13%. On October 8, the latest PTA quote was 7,856.25 yuan/ton, up 18.92% over one month. Shen Yunxi, general manager of Wujiang Yunzhu Textile Co., Ltd., said fabric export orders typically operate on cycles of several months, some lasting nearly a year. With thin industry margins, even a slight rise in raw material costs wipes out earlier profits, and a sudden spike can turn a single order into a loss-making deal. Currently, export profits on some conventional fabrics are only about $0.1 per meter, a space easily covered by cost increases.

Logistics: Middle East Route Freight Rates Soar
Obstructions to passage through the Strait of Hormuz directly pushed up freight rates. In mid-May, freight on the Shanghai-Persian Gulf route once surged to $4,131 per TEU, exceeding the pandemic-era peak; by August it further broke through $10,000. In early October, the China containerized freight index for the Persian Gulf-Red Sea route stood at 4,068.55 points, nearly twice that of the Europe route. Jin Musheng, head of a large textile company in Keqiao, recalled that last year shipping one high-cube container to Dubai cost about $1,500, and it has since risen from over 3,000 and 4,000 to more than 10,000. Transshipment fees and "war risk surcharges" are equally troublesome: for a batch of goods routed through India and Pakistan to Dubai port, the per-container transport cost increased by three to four thousand dollars, almost eating up the entire order's profit.

Capacity Contraction and Model Adjustment
The dual rise in costs weakened overseas customers' willingness to place orders. In July, the comprehensive operating rate of chemical fiber weaving in Keqiao and Shengze fell to 51.68%, with nearly 30% of small water-jet loom and knitting factories shutting down for maintenance, circular knitting categories operating below 40%, and printing and dyeing supporting enterprises at only 40-50% capacity. Companies turned to "short, flat, fast" responses: Wujiang Xinjinhua Textile Co., Ltd. compressed some fabric production cycles from 30 days to 15-20 days; Yunzhu Textile has been developing bio-based and plant-based fabrics since 2016, now accounting for half of its business, and while profits on traditional chemical fiber fabrics have shrunk, the new business has been unaffected.

Market Diversification and Policy Signals
From January to August, exports to the four traditional markets of the U.S., EU, ASEAN, and Japan totaled $107.91 billion, accounting for 53% of the total; exports to Belt and Road partner countries reached $111.77 billion, accounting for 55%, having stabilized above 55% in recent years. Jin Musheng said that in recent months Iranian customers have been coming to China to restock, with their inventories generally depleted, and he remains optimistic about the reopening of the Iranian market. In September, the Ministry of Industry and Information Technology and two other departments jointly issued the "15th Five-Year Plan for the Development of the Light and Textile Industries," explicitly promoting AI empowerment, accelerating green and low-carbon transformation, and improving the resource recycling system, proposing that by 2030 the operating revenue of light and textile enterprises above designated size exceed 30 trillion yuan, the penetration rate of digital production equipment exceed 63%, and green factories exceed 2,000. Industry insiders believe this round of shocks has accelerated the clearing of homogeneous low-end capacity, and high-value-added products and diversified market layouts are becoming an industry consensus.

Source: A row of upward red arrows on the phone! The U.S.-Iran conflict has lasted more than half a year—how is the textile fabric business in the Yangtze River Delta doing? · Originally published on 2026-10-14