The conflict in the Middle East is expected to drive up clothing prices in the second half of the year, according to industry analysts. Many consumers question how distant regional tensions could impact the cost of a basic T-shirt. Experts explain that the Middle East is a critical global hub for energy and petrochemical supplies, with Iran being a major exporter of crude oil and MEG. Recent disruptions to shipping through the Strait of Hormuz due to geopolitical clashes have pushed up prices of PTA and MEG by nearly 30%, directly raising domestic polyester prices.
A senior energy and chemicals analyst at CITIC Futures noted that the Middle East conflict has triggered systemic shocks across the polyester supply chain, from raw materials to end products, unleashing a wave of price increases throughout the global textile and apparel industry. Whether companies draw down raw material inventories or increase imports, supply gaps cannot be fully bridged. Passing higher costs to consumers is now a matter of timing and scale, with market acceptance becoming the key determinant of final price increases.
Another commodity researcher pointed out that the impact of Middle East tensions on the global textile sector began earlier. In Surat, India—a major textile hub—half of the looms have halted operations, dyeing factories have cut output, and garment manufacturers across South Asia face production stoppages due to shortages of raw materials and energy. Although China, as the world's largest polyester producer, has so far maintained stability thanks to its integrated supply chain and inventories, challenges are emerging downstream. Weaving and dyeing enterprises are reporting lower operating rates, reflecting an industry pattern where upstream segments profit, midstream segments contract, and downstream players incur losses. Downstream firms show limited acceptance of high-cost inputs, purchasing only for essential needs, which weakens overall industry sales and leads to inventory accumulation, forcing factories to reduce output.
The analyst added that while upstream production cuts have preceded those downstream, and profit margins are gradually shifting down the chain in a relatively balanced manner, new orders remain generally weak, and market sentiment is cautious. Ultimately, cost pressures will be passed on to consumers.
It is reported that over 90% of garments from fast-fashion brands such as Zara, H&M, and Uniqlo use polyester fiber, with production costs for some items already rising more than 20%. Prices of EVA, a petrochemical-derived material common in sports shoes, have also climbed. Sportswear brands like Nike and Adidas have warned of cost pressures, and several overseas retailers have issued early alerts about impending price hikes.
In futures markets, prices of crude oil, PTA, and MEG continue to strengthen.
Analysts caution that prolonged closure of the Strait of Hormuz would reshape global petrochemical supply chains, exposing the polyester industry to dual shocks from supply-demand imbalances and price volatility, while also amplifying fluctuations in futures trading.
Another futures analyst emphasized that the current oil price surge is transmitting deeply down the industrial chain—from crude to naphtha, PX, PTA, and MEG, and eventually to fabrics and finished garments—marking the onset of a global apparel inflation cycle.
In the short term, price increases at the retail level will persist as long as conflict continues. Summer clothing orders are set to see across-the-board price hikes, with finished garment retail prices projected to rise 5% to 15%. However, elevated prices may dampen consumer demand, which could in turn curb further raw material price increases. Over the medium to long term, should tensions extend beyond six months, the global textile and apparel supply chain could undergo substantial restructuring. Production capacity in regions reliant on Middle Eastern energy and raw materials may shrink, while countries with comprehensive industrial chains and stronger risk resilience, such as China, are likely to capture more overseas orders.
For ordinary consumers, affordable high-quality clothing will become scarcer, and the value-for-money appeal of basic apparel will decline. Shoppers may face a choice between paying more or settling for lower quality, as the era of low-cost fast fashion recedes.
High-cost pressures are expected to push the industry into a new phase characterized by higher prices, slower inventory turnover, and narrower profit margins. At the same time, these challenges will encourage companies to optimize raw material sourcing and diversify supply chain footprints to enhance overall risk resistance.
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