Crude oil prices fell below $70 per barrel on June 24, returning to levels seen before the escalation of tensions in the Middle East. Yet polyester filament yarn prices remain nearly 1,000 yuan per ton higher than those pre-crisis levels. This price gap is tearing apart the logic of the entire chemical fiber supply chain.
The Inventory and Operating Rate Dilemma
Polyester plants are not unwilling to cut prices. From a cash flow perspective, current margins on polyester filament yarn appear healthy. The real problem lies in inventory costs. Data shows POY inventory stands at 30 days, FDY at 35.7 days, and DTY at a staggering 41.8 days. These inventories were produced at much higher raw material costs, meaning any significant price cut would immediately turn unrealized losses into real ones.
On June 24, some polyester factories did lower filament yarn prices by 50-150 yuan per ton, but the reduction was far from enough to close the gap with crude oil. Critically, the current operating rate for domestic direct-spun polyester filament yarn is only 73.81%, slightly up 0.29% from the previous week, and remains near a three-year low. Low operating rates mean factories have no urgent need to clear inventory quickly; they prefer a strategy of 'slow price cuts, slow sales' to buy time.
The Weaving Mill's Waiting Game
For weaving mills, the high cash margin on polyester filament is itself a signal—there is still room for prices to fall. If they purchase now, the cost per ton could be hundreds or even thousands of yuan higher than if they wait a month, yet the final product price may not rise accordingly due to downstream competition. As a result, most mills have entered a 'buy only when necessary' mode, limiting purchases to orders with firm delivery dates.
This standoff is no accident. Upstream polyester plants use low operating rates to stabilize prices, while downstream weavers use low purchasing volumes to force price cuts. Both sides are waiting for the other to blink. The real deciding factor is end-user demand.
Weak Demand and Emerging Opportunities
The core driver of the current chain divergence is weak supply relative to demand, compounded by insufficient domestic consumption. Summer is typically peak season for sun-protective clothing, but unusually cool weather this year has delayed the start of related orders well into late June, directly suppressing downstream demand for polyester filament.
However, not all is bleak. With the Strait of Hormuz shipping channel fully reopened, global crude oil and commodity trade order is gradually restoring. Several overseas economies are accelerating their recovery, which is expected to boost international textile consumption. Incremental export orders may partially offset the weakness in domestic demand, alleviating some downward pressure on the polyester filament market.
The Stalemate Continues
In the short term, the polyester chain will likely maintain a pattern of weak demand, high inventories, and wide price gaps. The tug-of-war between polyester plants and weaving mills will persist, with neither side holding overwhelming bargaining power. For market participants, patience and precise judgment of end-order timing are now the most valuable assets.