Crude oil prices have fallen back to pre-Middle East crisis levels, yet polyester filament yarn prices remain nearly 1,000 yuan per ton higher—a price gap that is tearing apart the upstream and downstream of the polyester chain.
The Price Gap Paradox: Why Polyester Doesn't Follow Oil
On June 24, US WTI crude oil futures briefly dipped below $70, returning to the range seen before the recent Middle East geopolitical tensions. Although prices bounced back on the 25th due to renewed instability, by the 26th oil was again hovering around $70. Logically, a sharp drop in crude, the most upstream raw material, should quickly pass through to PTA, MEG, and finally polyester filament. Yet reality tells a different story: current polyester filament prices remain nearly 1,000 yuan per ton above pre-conflict levels.
This divergence is no accident. On the futures side, PTA and MEG have essentially fallen back to their starting points, giving polyester plants a healthy paper cash flow. However, there is a chasm between paper profits and actual sales—high inventory costs mean that any price cut would turn unrealized losses into real ones. According to industry data, POY factory inventories stand at 30 days, FDY at 35.7 days, and DTY at a hefty 41.8 days. Faced with such inventory pressure, polyester mills prefer a strategy of 'slow price cuts, slow sales' rather than releasing price elasticity all at once.
Upstream-Downstream Gaming: Weavers' 'No-Buy-Unless-Necessary' Stance
For weaving enterprises, the high cash flow of polyester filament signals ample room for future price declines. Unless they have confirmed orders to fulfill, purchasing raw materials just to build inventory could lead to a cost difference of hundreds or even thousands of yuan per ton within a month. Consequently, downstream mills have largely adopted a 'no-buy-unless-necessary' stance, significantly slowing procurement.
This gaming is reflected in capacity data. On June 24, the operating rate of domestic direct-spinning polyester filament plants was 73.81%, a slight increase of 0.29% from the previous week. However, looking at a longer timeline, this load level is already at a three-year low. While low operating rates should help control inventories, their effect is limited amid weak demand. The market's rumored 'major plant production cuts' have not been confirmed by actual capacity figures.
Supply-Demand Imbalance: Weak Domestic Demand Meets Export Opportunities
The core root of the current chain divergence is a supply-demand imbalance and insufficient domestic demand. The summer season, typically a peak for sun-protective clothing, has failed to take off due to unusually cool weather, transmitting weak terminal consumption upstream and creating a demand 'vacuum'.
However, not all is bleak. With the full reopening of shipping lanes in the Strait of Hormuz, global crude and commodity trade order is gradually recovering. Multiple overseas economies are accelerating their recovery, which is expected to boost international textile consumption demand. This provides a noteworthy support factor for China's textile export market. Incremental export orders may partially offset the pressure from weak domestic demand, alleviating some of the downward pressure on the polyester filament market.