Crude oil prices have returned to pre-Middle East crisis levels, yet polyester filament prices remain nearly 1,000 yuan per ton higher. This price gap is triggering a delicate tug-of-war across the polyester supply chain.
Crude Oil Plunge vs. Polyester Stalemate
On June 24, U.S. WTI crude oil futures briefly fell below $70 per barrel, directly back to levels before the latest Middle East tensions. Although prices rebounded on June 25 due to renewed geopolitical uncertainty, crude oil hovered around $70 again on June 26. Meanwhile, polyester filament prices remain nearly 1,000 yuan higher than before the crisis.
From a futures perspective, PTA and ethylene glycol have essentially returned to their starting points, but polyester filament has not followed suit. According to Longzhong data, the capacity utilization rate of domestic direct-spun polyester filament plants stood at 73.81% on June 24, up 0.29% from the previous week. Although this level is at a three-year low, the crude oil plunge caused PTA and ethylene glycol to drop sharply, leaving polyester filament with no reason to rise. On June 24, some polyester plants further cut polyester filament prices by 50-150 yuan per ton, but for textile mills, this reduction is far from sufficient.
High Cash Flow vs. Inventory Pressure
Polyester filament currently enjoys impressive cash flow on paper, which is precisely why weaving mills are holding back. For weavers, high cash flow signals a high likelihood of future price declines. Unless they have urgent orders, buying raw materials for inventory could mean a cost difference of hundreds or even thousands of yuan per ton over a month, while the final product sells at the same price. As a result, weavers have adopted a 'buy only when necessary' stance.
However, polyester plants are not in a comfortable position either. Although cash flow indicators look good, the production cost of existing inventory is not low. Industry data shows POY inventory at 30 days, FDY at 35.7 days, and DTY at 41.8 days. Cutting prices now would turn unrealized losses into real ones. With low capacity utilization, polyester plants have no urgent need to offload inventory; they prefer to gradually lower prices and sell slowly.
Supply-Demand Imbalance as Core Issue
The divergence in the supply chain stems from weak demand relative to supply, with insufficient domestic demand being the core pain point. Summer is typically the peak season for sun-protective clothing, but this year's unusually cool weather—still cool near July—has delayed the seasonal uptick.
However, there are bright spots. With the full reopening of the Strait of Hormuz shipping channel, global crude oil and commodity trade is gradually normalizing. Several overseas economies are accelerating recovery, which could boost international textile consumption demand. Export order growth may partially offset domestic weakness, easing downward pressure on the polyester filament market.
In the short term, the polyester supply chain is expected to maintain its pattern of weak supply-demand balance and high price gaps, with continued tug-of-war between upstream and downstream players.