On February 28, following attacks by the United States and Israel on Iran, Iran announced the closure of the Strait of Hormuz shipping route. Multiple tanker owners and traders have suspended the transport of crude oil, fuel, and liquefied natural gas through this strait.

As the conflict between the U.S., Israel, and Iran continues to escalate, global costs for raw materials closely tied to China's textile and apparel industry—including crude oil, chemicals, chemical fibers, and dyes—have also risen significantly. The intensified Middle East conflict impacts China's textile and apparel sector primarily through four pathways:

First, rising crude oil prices → increased costs for polyester staple fiber, PTA, polyester filament yarn, etc. → shifts in the cotton/polyester price ratio;

Second, rising crude oil prices → increased chemical raw material costs → higher prices for fertilizers, agricultural films, pesticides, fuels, etc. → elevated costs for cotton, textiles, and apparel;

Third, rising crude oil → significant increases in gasoline and diesel prices → higher transportation/export costs for cotton, textiles, and apparel;

Fourth, closure of the Strait of Hormuz → shipping companies rerouting via the Cape of Good Hope → not only significantly extended transportation and delivery times for textiles and apparel, but also sharply increased freight costs → profits eroded or even losses incurred.

Statistically, since late February: - Shanghai Futures Exchange's April crude oil contract surged from 470.8 to 708.7 points, a 237.9-point jump (50.53% increase); - PTA's May 2026 contract rose from 5182 to 5858 points (13.04% increase); The main 2604 contract for 1.4D*38mm polyester staple fiber has climbed from 6602 to 7334, a 11.09% increase.

Over the past week, spot prices for polyester staple fiber and polyester filament yarn in markets including Jiangsu, Zhejiang, Guangdong, Shandong, and Fujian have all followed suit with substantial increases. Textile and apparel enterprises in coastal regions like Zhejiang and Shandong reported that a substantial portion of orders received in January-February for exports to the US, Europe, South America, and the Middle East faced fulfillment pressures. Companies have been negotiating with clients to cancel orders, postpone contract execution, or renegotiate contract prices and delivery schedules. Continuing fulfillment would not only drastically reduce profits or even result in losses but also make timely shipment and delivery impossible.

A Guangdong-based trading company noted that beyond raw material cost surges eroding profits on existing orders, freight rates have skyrocketed since late February (up 150-250%), with some shipping lines imposing war risk premiums surging 300-500% and others refusing coverage. while some insurers have ceased offering coverage for cargo ships). Concurrently, the renminbi's appreciation against the US dollar shows no signs of abating. Domestic textile and apparel enterprises now face challenges on three fronts. Beyond the significant difficulties in fulfilling orders secured in January and February, willingness to accept new orders is steadily declining. Companies must not only engage in repeated price negotiations with clients but also carefully assess transportation and delivery risks alongside the impact of RMB appreciation.

As an integrated internet platform providing benchmark prices, on March 6, the benchmark price of SunSirs polyester staple fiber was 7082.61 RMB/ton, an increase of 7.13% compared with the beginning of the month (6611.53 RMB/ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

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