Recently, many of you have noticed that textile and chemical fiber prices in China have remained relatively elevated. We would like to briefly explain the core reason behind this trend.

This is not a demand‑driven price increase, but rather a cost‑push effect coming from the exchange rate.

The logic chain is very clear:

The Fed's ongoing hawkish signals → a stronger US dollar → RMB depreciation against the dollar → higher import costs for dollar‑denominated chemical fiber raw materials → domestic prices for polyester, nylon, spandex, and other chemical fibers moving up accordingly.

So far this year, the Federal Reserve has kept interest rates unchanged at several meetings, but its official communications have consistently leaned hawkish, keeping the market's expectations for future rate hikes alive. Under this backdrop, the US dollar has remained strong, while the RMB has come under corresponding depreciation pressure.

China's chemical fiber industry relies heavily on imported petroleum‑based feedstocks – including PTA, MEG, and other polyester intermediates, as well as various petrochemical derivatives used for nylon and spandex production. These materials are all priced and settled in US dollars internationally. When the RMB depreciates, domestic mills have to spend significantly more RMB to purchase the same volume of raw materials. This incremental cost cannot be fully absorbed internally, and it inevitably feeds into the ex‑factory prices of chemical fiber products.

At the same time, the textile sector is currently in its traditional off‑season, with overall end‑user orders remaining subdued. Domestic demand for apparel and home textiles is relatively weak, and export orders have not shown any concentrated surge. In other words, downstream demand is not driving prices up – the real driver is the cost pressure from exchange‑rate movements.

Therefore, the current "high" level of chemical fiber prices is a cost‑driven high. Whether this price level can ease in the short term will largely depend on the trajectory of the US dollar and the Fed's future policy stance.

We recommend that you factor this into your order planning and make procurement arrangements accordingly. If you have any questions, please do not hesitate to contact us.