In the first quarter of 2026, China's textile industry presented a stark "tale of two extremes": polyester exports hit a record high, while the prices of core raw materials-such as cotton and polyester staple fiber-surged significantly, leading to a continuous squeeze on profit margins for yarn and fabric manufacturers.
Polyester Exports: High-Level Growth Led by Filaments
According to customs data, China's polyester product exports reached 1.2775 million tons in March 2026, a year-on-year increase of 2.82%. Cumulative exports for the first quarter totaled 3.6462 million tons, up 8.40% year-on-year. This marks the third consecutive month of record-breaking export volumes for the corresponding period, demonstrating the robust competitiveness of China's polyester industry within the global supply chain.
Among these products, polyester filament performed most impressively, with exports rising 14.98% year-on-year in March. The primary driving force behind this growth was the Indian market: following India's lifting of the BIS certification requirement, China's filament exports to India surged to 64,700 tons in March-a substantial 33.36% year-on-year increase-solidifying India's position as the largest export market for polyester filament.
Raw Material Costs: A "Dual Surge" in Cotton and Polyester Staple Fiber
In stark contrast to the booming export market, upstream raw material prices climbed sharply:
Cotton: Following the Lunar New Year holiday, Zhengzhou Cotton futures experienced two rounds of rapid price hikes. Spot prices for ginned cotton cumulatively rose by approximately 1,600 RMB per ton, reflecting a strengthening correlation between the futures and spot markets.
Polyester Staple Fiber: Influenced by geopolitical conflicts, crude oil price volatility was transmitted downstream to the chemical fiber sector, resulting in a cumulative price increase of approximately 1,200 RMB per ton for polyester staple fiber.
The simultaneous rise in the prices of these two core raw materials created a "dual-cost inflation" scenario, directly squeezing profit margins across the intermediate segments of the supply chain-from cotton spinning to fabric manufacturing.
Impact on Yarn and Fabric Manufacturers
The rising costs of raw materials have not yet been fully passed on to downstream sectors. Although export orders remain stable, end-customers have limited tolerance for price increases in finished goods. Consequently:
Corporate procurement costs have risen, yet sales prices are difficult to adjust in a timely manner.
Profit margins have narrowed significantly.
Order-taking and production scheduling strategies have become more cautious, with a greater preference for short-term, small-batch orders.
Q2 Outlook
Polyester exports are expected to maintain their resilience in the second quarter; polyester filament, in particular-bolstered by demand in markets such as India-is poised to continue leading the sector. However, raw material prices are highly likely to remain volatile at elevated levels, with geopolitics, energy prices, and the supply-demand dynamics of cotton remaining the primary variables.
Key Areas to Monitor:
Changes in export policies for polyester filament bound for India.
Price trends in crude oil and cotton futures.
Flexible adjustments to inventory levels and order-taking pace.