On June 26, WTI crude oil futures for August delivery on the New York Mercantile Exchange closed at $69.23 per barrel, a single-day drop of 3.74%, after briefly dipping to $68.47 during the session. Brent crude futures fell even more sharply, closing at $71.99 per barrel, a decline of 4.34%. This marks the most severe single-day slump in international oil prices in nearly a month.
Event Background
The timing of the oil price plunge coincides with the traditional seasonal transition period for the textile industry. The third quarter typically marks the start of autumn/winter fabric stockpiling, and the cost trend of polyester raw materials directly impacts the budget planning of weaving mills. The price of crude, hovering around $70, decisively broke through the key psychological level, with WTI hitting an intraday low of $68.47, signaling a downward shift in the pricing center for upstream basic chemicals such as naphtha and PX.
Looking at recent oil price trends, market concerns over global demand prospects have resurfaced. Despite the OPEC+ coalition maintaining its production cut agreement, macroeconomic uncertainties—including the direction of interest rate policies in Europe and the U.S., and weak manufacturing PMI data from major economies—continue to dampen bullish sentiment. Textile chemical fiber raw materials, as downstream products of crude oil, are highly sensitive to oil price volatility.
Industry Impact
The transmission of the oil price slump to the chemical fiber chain typically has a lag of 1-2 weeks. PTA (Purified Terephthalic Acid), the direct raw material for polyester filament, is influenced by both crude oil and PX prices. Based on the current WTI at $69, the production cost line for PTA is expected to shift downward by approximately 200-300 RMB per ton. Polyester filament varieties such as POY, FDY, and DTY, which already faced high inventory pressure after earlier raw material price hikes, may see accelerated price corrections due to the oil price slump.
For downstream weaving mills, lower raw material costs mean a short-term restoration of profit margins. However, it is important to note that the extent of chemical fiber price declines may not fully mirror the oil price drop, as polyester plants' price support willingness, industry operating rates, and end-order conditions will also influence final pricing. If oil prices remain consistently below $70, chemical fiber procurement costs in the third quarter could be 5%-8% lower than in the second quarter.
In the yarn market, the price spread between cotton and chemical fibers will also undergo passive adjustments. Recently, cotton prices have remained relatively firm, limiting the substitution effect of chemical fibers. If polyester prices weaken due to lower oil prices, the cotton-polyester spread will widen, prompting some weaving mills to adjust their fiber mix by increasing the proportion of polyester to control costs.
From the perspective of foreign trade, textile competitors in Southeast Asia also benefit from lower international oil prices, potentially offering more flexible export quotes for chemical fiber fabrics. Chinese textile enterprises need to monitor marginal changes in raw material cost advantages when negotiating export orders, to avoid passively conceding price concessions.