In 2026, the global cashmere market will continue to experience a tightening supply‑demand balance. Affected by factors such as changes in grassland ecosystems and reductions in grazing scales, the overall output of high‑quality raw cashmere has declined, leading to a constrained supply of extra‑fine cashmere and sustained high, volatile prices. Fluctuations in upstream raw material costs are being passed down the value chain, placing significant operational pressure on producers across carding, spinning, and garment‑making stages. According to industry statistics, in the first half of 2026, China’s imports and exports of cashmere and related products remained resilient, with total trade reaching US$912 million—a year‑on‑year increase of 14.53%. Specifically, exports of combed top and cashmere yarns posted steady growth, while overseas demand for finished cashmere apparel remained stable, underscoring that foreign trade continues to be a key driver of growth for China’s domestic cashmere industry.

Qinghe County in Hebei Province, a core domestic cluster for the cashmere industry, brings together over a thousand cashmere‑related enterprises. More than 60% of China’s raw cashmere is processed and circulated here, with a fully integrated value chain that spans raw‑fiber procurement, carding and combing, spinning and dyeing, fabric weaving, knitted garment production, and both domestic and international sales. However, intra‑cluster differentiation is intensifying: many small and medium‑sized firms focused on a single stage—such as carding—lack stable supply channels for raw materials, making them vulnerable to rising input costs and leaving their profit margins under constant pressure. By contrast, vertically integrated companies, leveraging diversified raw‑material sourcing, mature deep‑processing capabilities, and an extensive network of domestic and overseas customers, demonstrate greater operational resilience amid market volatility, steadily expanding their market share.

Many established wool‑spinning manufacturers in the industry have integrated their operations across the entire value chain, from raw cashmere procurement and dehairing to combing, spinning, dyeing, and finished‑goods production. Domestically, they have strategically positioned themselves in key cashmere‑producing regions such as Inner Mongolia, while simultaneously expanding overseas channels for high‑quality cashmere imports, securing a diverse portfolio of raw materials spanning different finenesses and staple lengths. On the production side, they have equipped their facilities with multiple sets of specialized combing machines, built advanced deep‑processing manufacturing bases, and introduced state‑of‑the‑art spinning and dyeing systems from abroad, establishing large‑scale capabilities for producing dehaired cashmere and cashmere yarns. They have also implemented standardized production management processes certified under ISO quality standards. At the business level, they balance bulk raw‑material trading with the manufacture of value‑added finished products, offering a comprehensive range of offerings that include domestically sourced and imported dehaired cashmere, cashmere slivers, coarse and fine spun cashmere yarns, blended fabrics, as well as end‑use items such as cashmere sweaters, scarves, shawls, and cashmere blankets. Their products are supplied to numerous domestic textile mills and are exported to East Asia, multiple European countries, North America, and Hong Kong, among other markets.

Industry analysts predict that the Matthew effect in the cashmere sector will continue to intensify. Companies that rely solely on a single stage of processing are particularly vulnerable to fluctuations in raw‑material prices. Securing stable, high‑quality raw materials upstream and extending downstream into spinning, fabric production, and advanced finishing—while simultaneously tapping both domestic and international markets—will become the mainstream strategy for cashmere manufacturers seeking to mitigate market risks. Moreover, firms must continually enhance their comprehensive capabilities, including raw‑material grading, physicochemical testing, and flexible delivery, to meet the increasingly stringent supply‑chain audit standards of overseas customers and maintain a solid market position in an increasingly complex and volatile environment.