On June 26, international crude oil markets experienced sharp volatility. Brent crude expanded its daily loss to 4%, closing at $72.17 per barrel, while WTI crude fell below the $70 mark, with intraday losses exceeding 2.8% at one point. This single-day decline is the largest in nearly three months, directly impacting the textile chemical fiber supply chain.
Cost Support Crumbles
Crude oil is the source of textile chemical fiber raw materials, and its price fluctuations directly affect the costs of intermediates such as PTA and ethylene glycol. This plunge occurred within just 12 hours—from WTI crude falling over 1% at 11 a.m. to Brent crude expanding its loss to 4% by 11 p.m., with the price decline far exceeding market expectations. Industry data shows WTI crude once dipped to $69.33 per barrel intraday, down nearly $2 from the previous trading day.
For textile companies, this means the cost support for the polyester chain is loosening. PTA, the direct raw material for polyester filament and staple fiber, is highly correlated with crude oil prices. Historical experience suggests that a single-day crude oil decline of over 3% typically transmits to polyester chip and yarn quotes within 3 to 5 working days. Currently, inventories of polyester filament products such as POY, FDY, and DTY are at moderate to high levels, and the downward shift in costs will further dampen end-user purchasing enthusiasm.
Downstream Procurement Strategy Faces Adjustment
The direct market reaction to the crude oil plunge is a rapid rise in wait-and-see sentiment. In major textile fabric distribution centers like Shengze and Keqiao, traders and weaving companies have generally postponed raw material replenishment. Previously, due to high crude oil prices, polyester filament prices had remained firm for three consecutive weeks, and weaving companies' raw material inventories were generally low. Now that costs are loosening, downstream players widely expect polyester plants to lower ex-factory prices, so they choose to "wait for declines" rather than "buy the dip."
This shift in mentality will put inventory pressure on chemical fiber producers. If polyester plants proactively lower prices to maintain sales, it could trigger a round of "price wars," further accelerating raw material price declines. Conversely, if polyester plants choose to hold prices firm, they may face declining sales rates and inventory buildup. Regardless of the path, the procurement rhythm and contract pricing for textile companies will become more complex in the short term.
Transmission Window in the Chain
From crude oil to textile fabrics, price transmission typically takes 1 to 2 weeks. The current timing coincides with the traditional off-season for the textile industry, with weaving operating rates having gradually declined from highs in May to around 70%. Demand is already weak, and the sudden collapse in costs will exacerbate market pessimism. Customs data shows that textile and apparel export growth in the first five months of this year has slowed to single digits, and the domestic market also lacks bright spots.
Against this macroeconomic backdrop, the crude oil plunge could become the trigger for price adjustments across the chain. Notably, this plunge is not an isolated event—rising expectations of OPEC+ production increases and the continuation of interest rate hike cycles in major global economies have already weighed on the crude oil market. Textile companies need to be vigilant: if oil prices remain below $70 per barrel, chemical fiber raw material prices could fall another 5% to 8% from current levels, directly altering the cost basis for orders in the second half of the year.