Crude oil prices have returned to pre-crisis levels, but polyester filament prices remain 1,000 yuan higher. On June 24, WTI crude oil futures fell below $70, recovering to around $70 on June 26 after a brief rebound. Yet polyester filament prices are still nearly 1,000 yuan per ton above pre-rally levels. Behind this price gap lies a complex game between polyester mills and weaving enterprises over costs, inventories, and expectations.
Oil Returns to Baseline, Polyester Filament Lags
China Customs data shows that crude oil prices have largely erased geopolitical premiums. WTI falling below $70 on June 24 indicates a return to pre-Middle East crisis levels. However, polyester filament prices have not followed suit—they remain about 1,000 yuan per ton higher than before the surge. This divergence stems from lagging transmission and cost structure differences.
PTA and ethylene glycol futures have essentially returned to their starting points, but polyester filament price adjustments are notably slower. Industry data shows that on June 24, some polyester mills only cut filament prices by 50-150 yuan per ton, far less than the drop in raw materials. This means polyester filament cash flows are substantial, but weaving enterprises see room for further price declines.
High Inventories and Costs: Polyester Mills' Dilemma
Polyester mills are not unwilling to cut prices; they are trapped by inventory costs. Longzhong data shows that on June 24, domestic direct-spun polyester filament capacity utilization was 73.81%, up slightly by 0.29% from the previous week, but still at a three-year low. Low operating rates should ease inventory pressure, but reality tells a different story: POY factory inventory stands at 30 days, FDY at 35.7 days, and DTY at 41.8 days.
These inventories were produced when raw material costs were high. Cutting prices now would turn unrealized losses into actual ones. For polyester mills, with low operating rates, there is no urgent need to sell, so they prefer slow price reductions and slow sales. This strategy maintains cash flow on paper but also reinforces weavers' wait-and-see attitude.
Weavers' 'Buy Only When Necessary' Logic
For weaving enterprises, high cash flow in polyester filament signals further price downside. Industry data shows that the current price gap between filament and pre-rally levels is about 1,000 yuan. This means that if production is for inventory rather than orders, delaying purchases by a month could save hundreds or even thousands of yuan per ton.
As a result, weavers have entered a 'buy only when necessary' mode. This waiting further suppresses filament demand, creating a negative feedback loop. Weak supply-demand balance and insufficient domestic demand are the root causes of the current divergence. Summer is typically the peak season for sun-protective clothing, but this year's cooler weather has delayed the season. As of late June, the market has yet to pick up, dampening purchasing sentiment.
Export Orders May Break the Deadlock
However, the market is not without catalysts. With the full reopening of the Strait of Hormuz shipping channel, global crude oil and commodity trade order is gradually recovering. Multiple overseas economies are accelerating their recovery. National Bureau of Statistics data also shows that textile consumption demand in some overseas markets is picking up.
This trend could boost China's textile exports. Incremental export orders may offset some domestic demand weakness, alleviating downward pressure on the polyester filament market. For polyester mills, export demand recovery would reduce reliance on the domestic market, helping stabilize prices. For weavers, the certainty of export orders would prompt earlier stockpiling, breaking the current wait-and-see deadlock.