International oil prices experienced a sharp decline on the afternoon of June 26. WTI crude broke through both the $71 and $70 thresholds within a few hours, hitting a low of $69.90 per barrel with an intraday drop of 2.00%. Brent crude followed suit, also falling 2.00% to $73.67 per barrel.
The Transmission Chain of Weakening Costs
Crude oil prices serve as the pricing anchor for the polyester industrial chain. WTI falling below $70 per barrel means that the valuation center for intermediate raw materials such as naphtha, PX, PTA, and MEG will shift downward overall. For the textile industry, the most direct impact is on polyester filament yarn and polyester staple fiber—these two types of chemical fiber raw materials account for over 70% of China's textile fiber consumption.
Historical experience shows that for every $5 per barrel drop in oil prices, PTA production costs decrease by approximately 150-200 yuan per ton, and polyester filament yarn costs correspondingly decrease by 200-300 yuan per ton. If this decline persists, the cost support for chemical fiber enterprises will significantly weaken, and downstream weaving companies' purchasing sentiment will turn cautious.
Immediate Reactions in Industrial Clusters
In major polyester filament production and sales areas such as Shengze, Changxing, and Xiaoshan, traders and weaving mills have begun reassessing their raw material inventories. Over the past month, polyester plants maintained relatively high sales rates, with some even overselling. After the sharp drop in oil prices, downstream customers' willingness to pick up goods may cool, gradually increasing inventory pressure on polyester plants.
Meanwhile, gray fabric transactions in terminal fabric markets like Keqiao and Nantong also face uncertainties. Expectations of lower raw material costs will suppress gray fabric prices, putting traders holding high-priced inventories at risk of impairment. Late June is traditionally a slow season with limited orders, and this round of oil price decline may further compress profit margins in the weaving segment.
Impact on Procurement and Pricing Strategies
For procurement departments of textile companies, it is necessary to distinguish between short-term sentiment and medium-term trends. If the oil price drop is merely a technical correction, raw material prices may stabilize in early July. However, if global demand expectations continue to weaken, oil prices may enter a longer downward channel.
It's worth noting that polyester plants still have some profit margins and lack strong motivation to cut prices proactively. But if oil prices remain below $70, PTA and MEG futures will face hedging pressure, and spot prices are likely to follow downward. At that point, chemical fiber companies may be forced to lower quotes to maintain cash flow.