Raw material prices for woven bags are soaring, leaving factories facing a supply shortage.

In March 2026, the plastic weaving industry in East China and Shandong Province is facing a new round of cost pressures. According to the latest market monitoring data, polypropylene (PP) staple fiber prices in Linyi, Shandong, are fluctuating between RMB 8,550 and RMB 8,700 per ton, while prices in the East China market remain firm at the higher end, ranging from RMB 8,750 to RMB 9,050 per ton. These price levels represent an increase of more than 12% compared with the same period in 2023, directly driving up the production costs of woven bags and leaving many manufacturers in a predicament of cautious order-taking and critical inventory shortages.

Since 2023, international crude oil prices have remained high due to geopolitical conflicts, while domestic environmental protection policies have imposed constraints on plastic pellet producers, leading to a tightening of raw material supply. Taking the Shandong market as an example, from March 17 to 19, 2026, the price of PP staple fiber rose by a cumulative RMB 50 per ton over three days, whereas the ex-factory price of transparent woven bags increased by only RMB 200 per ton during the same period, to RMB 11,500 per ton, further squeezing profit margins.

“Raw material costs account for more than 65% of total production costs, and currently the gross profit per ton of woven bags is less than RMB 800—down nearly 40% from 2023,” revealed the head of a medium-sized plastic weaving plant in Shandong. To cope with cost pressures, the factory has suspended acceptance of low-margin orders and shifted its focus to high-value-added products, such as 2.5-ton bulk bags priced at RMB 17,000 per ton and food-grade aluminum-coated composite bags. However, these products place stringent demands on equipment and technology, making it difficult for small and medium-sized enterprises to make a rapid transition.

## Escalating Supply-Demand Imbalance Leads to Prolonged Order Delivery Cycles

Under the dual pressures of rising raw-material prices and growing demand, the imbalance between supply and demand in the woven-bag market has become increasingly pronounced. On the one hand, industry demand continues to expand: according to a 2025 industry report, cement-packaging bags account for 35% of total demand, agricultural-product transportation packaging is growing at a rate of 7.4%, and cross-border e-commerce has driven a 17.8% increase in exports of large-capacity bulk bags. On the other hand, factory capacity utilization remains constrained by cost pressures and struggles to rise. Taking Linyi as an example, the average capacity utilization rate among local plastic-woven-bag manufacturers stands at just 83.3%, down 0.5 percentage points from 2023.

“Order schedules are now booked through mid-April, yet raw-material inventories are sufficient to sustain only 10 days of production,” said the sales manager of a plastic-bag manufacturing plant in East China. To ensure on-time delivery, the plant has been forced to increase the frequency of raw-material purchases; however, suppliers generally require cash-on-delivery, sharply intensifying financial pressure. Even more challenging is that some companies, unable to absorb the rising cost pressures, have opted to cut or halt production. According to industry association data, during January–February 2026, the number of large-scale plastic-bag manufacturers nationwide declined by 8% year on year, further consolidating industry concentration.

## Technological Upgrades and Environmental Policies Drive Industry Transformation

Faced with cost pressures, leading companies are seeking breakthroughs through technological innovation and product upgrades. For example, Zhongfu Shenying has invested in R&D to develop biodegradable polylactic acid (PLA) woven bags with a biodegradation rate of 92%. Although these bags cost 35% more than traditional products, they align with the policy direction of the “dual carbon” goals and have given the company a competitive edge in procurement and high-end markets. Meanwhile, Baose Shares is focusing on coated woven bags, using a three-layer co-extrusion process to keep water vapor transmission below 5 g/m²·24h, thereby meeting the moisture-proof requirements of industries such as fertilizers and animal feed and significantly enhancing the premium pricing power of its products.

The continued tightening of environmental protection policies is also accelerating industry consolidation. The 2025 “Notice on Strengthening the Governance of Excessive Packaging of Goods” explicitly mandates that by 2026, the recycling and utilization rate of woven bags must be increased to 50%, thereby compelling enterprises to upgrade their recycling processes. Companies such as Hunan Anshu have already established closed-loop recycling systems that convert used woven bags into recycled PP pellets, achieving a tensile strength retention rate of 85% compared with virgin materials while reducing costs by 20%, and have successfully scaled up applications in the express delivery packaging sector.

## Future Outlook: Short-Term Pressure, Long-Term Evolution Toward Green and Intelligent Solutions

In the short term, persistently high raw-material prices will continue to dominate the industry. According to forecasts by the Foresight Industry Research Institute, the average price of PP resin is expected to rise by as much as 10% year on year in 2026, potentially squeezing profit margins for small and medium-sized enterprises to below 4%. However, over the longer term, technological innovation and policy-driven initiatives will reshape the competitive landscape: on the one hand, the adoption of technologies such as precision coating and intelligent manufacturing is projected to reduce unit energy consumption by 18% and shorten order-fulfillment lead times by 40%; on the other hand, the cost of bio-based, biodegradable materials is expected to fall to 1.2 times that of conventional PE bags by 2027, thereby establishing a clear substitution advantage.

In this tug-of-war between costs and demand, the woven-bag industry is shifting from “scale expansion” to “value creation.” Only by accelerating technological innovation and deepening the green transition can it achieve sustainable development in the face of the dual challenges posed by volatile raw-material prices and tightening environmental regulations.