Brent crude oil extended its daily loss to 4%, with WTI falling below the psychologically important $70/barrel level. For the textile industry, this is not just a financial market tremor but a clear signal that the cost logic for chemical fiber raw materials is about to be rewritten.
Cost Side: Room for PTA and Polyester Prices to Fall
Crude oil is the starting point of the petrochemical chain. As Brent dropped from around $74/barrel to below $72, and WTI broke through $70, the production costs of intermediates like PX, PTA, and MEG will decline significantly. According to industry data, every 5% drop in crude oil prices can theoretically reduce PTA production costs by about 200-300 yuan per ton.
Polyester filament and staple fiber, the most widely used synthetic fibers in textiles, are highly correlated with PTA prices. Over the past month, polyester mills have been squeezed by high inventories and thin margins. This crude oil plunge will directly lower the pricing center of PTA, giving the polyester sector some breathing room. For weaving mills, lower raw material procurement costs are a clear short-term positive.
Demand Side: The Macro Worry Behind the Oil Price Crash
However, oil price drops are never just a cost story. Brent crude fell through $73 and $72 within hours, with the loss widening from 2% to 4% rapidly. This indicates the market is pricing in pessimism about global economic demand, not just supply factors.
Textile end-demand is closely tied to macroeconomics. An oil price crash often coincides with weakening consumer confidence and high retail inventories. For China's export-oriented textile industry, if apparel consumption in Europe and the US remains sluggish, lower raw material costs may not translate into effective orders. More concerning is the risk of a 'wait-and-see' attitude among downstream buyers, who may delay purchases in anticipation of further price declines.
Industrial Cluster Reaction: Keqiao and Shengze
In Keqiao (Shaoxing) and Shengze (Wujiang), two of China's largest textile clusters, market reactions have diverged. Some weaving mills have suspended large raw material purchases, waiting for PTA prices to bottom out. Meanwhile, some chemical fiber traders are rushing to destock to avoid inventory write-downs.
This tug-of-war is not new. After the 2020 negative oil price event, polyester prices experienced a six-month low-volatility period before recovering with demand. The current situation differs due to geopolitical factors and OPEC+ production cuts, but the weakening demand signal is equally concerning.