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The first half of 2026 has delivered a mixed picture for the silk industry – a "fire and ice" performance, if you will.

Silk market H1 2026 – fabric mills full, raw silk prices down 7.2%

On one side, fabric mills are running at full capacity, with orders booked through the end of August, and prices for popular items like Xiangyunsha (gambiered Guangdong gauze) have actually risen despite softer raw material costs. On the other side, raw silk prices have continued their slide from the start of the year – the 4A grade silk electronic index fell 2.86% in June alone.

Upstream down, downstream stable – this price divergence neatly captures the real state of the silk market in H1 2026.

Fabric Side: Full Capacity, Low Stocks, Strong Demand

"We're in peak season now – basically only about 10% of our inventory is left at the end of the month," a Hangzhou China Silk City executive told CCTV Finance. He visits the market two or three times a week, purchasing over 100,000 metres of fabric monthly, mainly Xiangyunsha.

This is not an isolated case. Driven by the 'Guochao' (national trend) movement and strong consumer interest, downstream fabric demand has surged, keeping mills in full operation with orders already booked through August.

Liuhe Group confirmed the trend. To guarantee on-time delivery, they are running full production lines 24/7, with production schedules already extended into the second half of the year.

With high demand, prices have remained firm. Despite the drop in raw silk prices, Xiangyunsha and other mulberry silk fabrics have seen stable or slightly higher ex-factory prices due to limited capacity and high technical requirements.

Raw Silk Side: Breaking a Seven-Year Tradition

The strong fabric market has not translated upstream.

In June 2026, the 4A grade raw silk electronic index fell 2.86% month-on-month, with pricing power shifting downstream and 'volume-for-price' strategies prevailing among reeling mills.

More notably, in May 2026 the 4A grade index fell 0.67% – breaking a seven-year streak of May gains since 2019, signalling a significant shift in supply-demand dynamics.

In price terms, raw silk fell from a peak of RMB 459,950 per tonne on 27 February to RMB 426,600 by 30 June – a drop of about 7.2%. By the end of July, the electronic index was around 4287, with 4A grade contract prices at about RMB 425,000 per tonne.

This downward trend has been driven by the spring cocoon harvest, which increased supply, combined with the traditional June weaving off-season and the winding down of fabric orders.

Key Takeaway

Raw silk prices have softened, but fabric prices have held firm due to capacity constraints. For buyers, this is a window to negotiate on raw material costs – but fabric availability and lead times remain the tighter constraint.

Exports: Overall Growth, Structural Divergence

Export data reflects a similar pattern of divergence.

From January to May 2026, China's total silk goods trade reached USD 692 million, up 6.23% year-on-year. Exports were USD 561 million, up 3.91%.

By market: EU27 (USD 174 million, +3.72%), USA (USD 95.4 million, +3.83%), and Vietnam (USD 48.7 million, +92.94%). Vietnam continued its rapid growth trajectory from 2025.

By category: raw silk exports were USD 175 million, up 5.15%, with Vietnam (+90.63%) and India (+22.36%) leading growth. Silk fabrics and finished products grew more modestly.

Sichuan's performance stood out. From January to May, Sichuan raw silk exports reached RMB 105 million, up 12.4% year-on-year. One major producer, Sichuan Antai Cocoon Silk Group, saw exports near RMB 35 million, up 22%, and expects to exceed RMB 100 million for the full year.

Domestic Demand: Guochao-Driven Recovery

Domestic consumption has been the bright spot in H1 2026.

The Q1 2026 China silk industry composite prosperity index stood at 49.57, up 1.05 points from Q4 2025, signalling a gradual recovery. The domestic sales order index reached 51.69, firmly in expansion territory, driven by delayed orders from late 2025 plus peak spring-summer demand.

Silk underwear and base layers became best-sellers, with top brands reporting 80% year-on-year sales growth in May. Silk duvets also gained traction on e-commerce platforms.

However, exports remained under pressure. The export order index stood at just 45.61 (contraction), reflecting cautious buying and slower order placement from overseas clients.

Outlook for the Second Half

Looking ahead, several trends are worth watching:

1. The price gap between fabric and raw silk may narrow. The industry has entered the period between spring and summer cocoon harvests, with raw material costs trending lower. As autumn/winter sampling and bulk ordering slows, fabric demand may ease.

2. El Niño is the biggest wildcard. Both the UN's FAO and the WMO have issued warnings of extreme weather in the coming months – a potential supply shock for autumn cocoons. If weather disrupts harvests, raw silk prices could reverse and rise.

3. Guochao consumption remains a pillar. Domestic interest in traditional and heritage silk products continues to grow, and e-commerce platforms are directing more traffic to guofeng (national style) categories. Domestic demand will likely continue to support the industry.

For sourcing decision-makers, raw silk prices are currently at a relatively low level, while fabric prices remain firm due to capacity constraints. If you have new collection plans for the second half, it is advisable to secure production capacity and pricing with your fabric suppliers early – waiting until the peak autumn/winter ordering season could mean longer lead times and tighter negotiation room.

Data sources: General Administration of Customs of China, China Silk Association, China Cocoon & Silk Trading Market, CCTV Finance, Yicai Global.

Frequently Asked Questions

Raw silk prices fell due to increased supply from the spring cocoon harvest, combined with a seasonal slowdown in weaving orders after the peak season. At the same time, fabric mills remained fully booked, which kept fabric prices firm. This created a disconnect between upstream raw silk and downstream finished fabric pricing.
Yes. Many mills have orders booked through the end of August 2026. Capacity remains tight, especially for popular items like Xiangyunsha (gambiered Guangdong gauze). Buyers are advised to secure production slots early, as lead times may extend into late Q3.
The outlook depends largely on weather conditions. El Niño is forecast to affect summer and autumn cocoon harvests, which could reduce supply and push prices back up. Buyers should monitor weather reports and consider locking in prices during the current softer market.
Domestic demand has been the main growth driver in H1 2026, driven by the 'Guochao' (national trend) movement. Inner sales order index stood at 51.69 (expansion territory), with top silk lingerie brands posting 80% year-on-year sales growth. In contrast, export orders remained weak, with the export order index at just 45.61 (contraction territory), reflecting global consumer caution.

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