On June 24, WTI crude oil futures briefly fell below $70, returning to pre-Middle East crisis levels. Although a slight rebound occurred on June 25 due to geopolitical fluctuations, prices hovered near $70 again on June 26. Meanwhile, polyester filament yarn prices remain nearly 1,000 yuan per ton higher than before the recent surge. This divergence between crude oil and polyester yarn is becoming the most critical pricing signal in the textile industry.
The Divergence Paradox
From the futures side, PTA and ethylene glycol prices have essentially returned to their starting points, theoretically removing cost support for polyester yarn. Yet in reality, polyester yarn prices have only been adjusted downward by 50-150 yuan per ton, far less than the raw material decline. This deviation is no accident. The cost structure of polyester plants limits their room for price cuts. According to industry data, current POY inventory stands at 30 days, FDY at 35.7 days, and DTY at 41.8 days. These stocks were produced at high-cost raw materials; significant price cuts would turn unrealized losses into actual ones.
More critically, the current capacity utilization rate for domestic direct-spun polyester filament yarn is only 73.81%, a near three-year low despite a slight 0.29% increase from the previous week. Low operating rates mean less pressure to sell, allowing polyester plants to adopt a 'slow price cuts, slow sales' strategy to buy time.
Weavers' Wait-and-See Logic
For weaving enterprises, the high cash flow of polyester yarn actually reinforces expectations of price declines. Since PTA and ethylene glycol have already fallen back, polyester yarn should follow, but the gap persists. This expectation mismatch has triggered a collective 'non-essential no-buy' behavior among downstream buyers. Unless they have orders to fulfill, weavers prefer to delay purchases, as a one-month difference could mean hundreds or even thousands of yuan per ton in cost variation, while final product prices remain unchanged.
This wait-and-see attitude is exacerbating the supply-demand imbalance. Oversupply and weak domestic demand are the core roots of the current chain divergence. The unusually cool summer this year has delayed seasonal orders for sun-protective clothing, further suppressing polyester yarn demand.
Can External Demand Be the Solution?
However, the market is not without bright spots. With the full reopening of the Strait of Hormuz shipping channel, global crude oil and commodity trade order is gradually recovering, and multiple overseas economies are accelerating their recovery. This trend is expected to boost international textile consumption, providing support for China's textile export market. Export order growth may partially offset domestic weakness and ease downward pressure on polyester yarn.
But in the short term, the pattern of weak supply-demand and high price differentials in the polyester chain will persist. The tug-of-war between upstream and downstream will dominate market trends, and the downward price adjustment for polyester yarn may be slow and bumpy.