On June 26, Brent crude oil widened its intraday decline to 4%, hitting a low of $72.17 per barrel, while WTI crude fell below the $70 mark to $69.33, down 2.81% for the day. This sharp sell-off was not an isolated event—the two benchmarks experienced three acceleration phases within 12 hours, from an early drop of over 1% to a doubled decline by evening, reflecting a concentrated release of market panic.
For the textile industry, every dramatic swing in oil prices is not merely a macro narrative but a direct transmission to the cost line of chemical fiber raw materials. Naphtha, PX, PTA, MEG, polyester chips—this value chain from crude oil to polyester filament yarn means that every $1 per barrel drop in oil theoretically reduces the cost of polyester POY by about 80-100 RMB per ton. When the daily decline reaches 4%, the 'cost anchor' of the chemical fiber chain is rapidly loosening.
Cost Collapse vs. Inventory Game
The biggest contradiction facing the polyester sector now is: upstream raw materials have sent a clear bearish signal, but midstream factory inventories remain relatively high. According to industry public data, as of late June, average inventory days for polyester filament yarn in Jiangsu and Zhejiang were around 18-22 days, with POY, FDY, and DTY all above last year's levels. High inventories combined with a sharp drop in raw materials force plants to face 'passive destocking' pressure—either cut prices to reduce stocks or cut production to protect margins.
Historical experience shows that when Brent crude quickly falls from the $80 range to around $70, polyester plants' willingness to hold prices weakens significantly. Similar scenarios occurred in 2019 and 2022: after oil fell more than 10% in a month, polyester filament yarn prices often followed with a decline of 300-500 RMB per ton within two weeks. On June 26, PTA futures had already fallen over 2%, MEG nearly 3%, and spot polyester chip quotes showed signs of weakness.
Impact on Downstream Weaving and Dyeing
Not all news from the oil crash is bad. For weaving mills and dyeing plants, lower raw material costs mean potential margin expansion—provided that end-product prices do not fall simultaneously. Major textile clusters like Shengze, Keqiao, and Nantong currently operate at around 70% capacity, with the domestic market in a traditional off-season and export orders yet to pick up significantly due to overseas inventory cycles. In this 'weak demand' environment, will cheaper chemical fiber be seen as a 'buying opportunity' or a signal to 'wait for further drops'?
From procurement behavior, inquiries from some weaving mills increased on the afternoon of June 26, but actual transactions did not surge. Industry insiders report that most mills adopted a 'one inquiry per day' tactic rather than batch locking. This suggests market consensus on oil's future direction remains divided—if this is a short-term technical correction, current prices may be a near-term bottom; but if global recession fears intensify, oil could test $65 or lower.