Oil price surge hits textile sector, spurring bio-based fiber shift

Rising oil prices are rippling through global textile supply chains, pushing up the cost of petroleum-based fibers and prompting manufacturers to accelerate a shift toward bio-based alternatives.

Geopolitical tensions in the Middle East have fueled a rally in crude oil, lifting the prices of downstream petrochemical products. Polyester, the world's most widely used fiber, has been among the hardest hit.

Data from TNC.com, a textile information platform, show that the price of polyester POY (partially oriented yarn), a key intermediate, has climbed steadily since late January, surpassing 7,000 yuan ($1,018) a metric ton before jumping to as high as 9,250 yuan on April 1.

The surge is squeezing margins across the apparel industry, where producers are struggling to pass on higher input costs amid subdued consumer demand. Manufacturers are increasingly adopting a wait-and-see approach, wary of further volatility in the price of raw materials.

"The traditional chemical fiber industry is deeply tied to oil prices, resulting in sharp swings and limited pricing power," according to Li Kejie, Asia-Pacific marketing manager of bio-based materials maker Sorona. "Competing purely on cost is no longer sustainable."

The global textile market is dominated by chemical fibers, particularly synthetic fibers derived from petroleum. These include polyester and spandex, which are widely used in apparel, home furnishings and industrial applications due to their durability, elasticity and relatively low cost.

Synthetic fibers account for about 62 percent of global fiber consumption, according to industry estimates, with polyester alone making up more than half of the total. That dominance has left the sector highly exposed to fluctuations in oil prices.

The impact is spreading across clothing categories. Performance outerwear, yoga apparel and fast fashion all rely heavily on synthetic blends, making them vulnerable to rising costs.

According to Cheng Weixiong, a fashion analyst and founder of Shanghai Liangqi Brand Management Co Ltd, premium outdoor brands such as Arc'teryx and Kailas are better positioned to weather the volatility. Their products — including jackets and technical apparel — depend heavily on nylon and polyester and are expected to see higher costs, but strong brand equity and pricing power, as well as their use of recyclable fibers, allow them to offset costs through product upgrades and selective price increases.

Mass-market apparel makers face a tougher choice. "Smaller brands are caught between raising prices and losing customers, or maintaining prices and sacrificing margins," Cheng said. "The shakeout in the sector is accelerating."

The latest price surge is prompting renewed interest in alternative materials, particularly bio-based fibers made from renewable resources, said Cheng. Companies are also revisiting natural fibers such as cotton, wool and linen as a way to reduce their reliance on petrochemicals, he added.

Sorona said its partially plant-based materials offer a more stable cost structure and improved performance characteristics, including elasticity and comfort, while aligning with sustainability targets.

Industry participants said the current disruption may mark a turning point, forcing manufacturers to rethink sourcing strategies and upgrade material structures.

"The focus needs to shift from price competition to value creation,"Li said. "Stability, sustainability and differentiation will define the next phase of growth." (source: China daily)