When international crude oil prices fell back to pre-Middle East crisis levels, the polyester chain did not follow suit. On June 24, US WTI crude briefly dropped below $70, then rebounded slightly due to geopolitical factors, but approached $70 again on June 26. Yet polyester filament yarn (POY/FDY/DTY) prices remained nearly RMB 1,000 higher than before the surge. Behind this spread lie two very different cost logics and sales strategies upstream and downstream—a game of inventory and cash flow is intensifying.
The Crude-Yarn Spread: Appearance vs. Real Cost
From the futures perspective, PTA and ethylene glycol have nearly returned to their starting points, making the paper cash flow of polyester filament yarn look quite generous. However, the raw material costs in polyester plants' current inventories are not low—POY inventory stands at 30 days, FDY at 35.7 days, and DTY at 41.8 days. These inventories were purchased at higher oil prices; selling at current prices would turn paper gains into real losses. Therefore, plants prefer to 'lower prices slowly and sell yarn gradually,' buying time rather than dumping inventory in one go.
For weaving mills, high cash flow signals further room for yarn price declines. Unless they have urgent orders, buyers generally adopt a wait-and-see approach—each ton of raw material could cost hundreds or even thousands of RMB less if purchased a month later, while the final product sells at the same price. This 'buy-only-when-necessary' mentality further depresses market trading activity.
Capacity and Demand: Inventory Stalemate Under Low Utilization
Londata shows that on June 24, the operating rate of domestic direct-spun polyester filament yarn capacity was 73.81%, up 0.29% from the previous week. But over a longer period, this load level is at a three-year low. Low utilization should theoretically help control inventory, yet actual inventory days remain high. The core reason is weak demand—summer is the peak season for sun-protection fabrics, but this year's cooler temperatures have delayed consumer spending, leading to fewer orders for weaving mills and thus weaker raw material procurement intentions.
Insufficient domestic demand is the central pain point of the current chain. Under a supply-strong, demand-weak pattern, even if polyester plants cut production, they cannot quickly digest inventory; weaving mills, with few orders, reduce raw material stocking. The two sides are locked in a 'you don't cut, I don't buy' stalemate.
External Variable: Can Export Orders Break the Deadlock?
The market is not without positives. With the full reopening of the Strait of Hormuz shipping channel, global crude and commodity trade order is gradually restoring. Faster economic recovery in several overseas economies is expected to boost textile consumption demand. For Chinese textile exporters, subsequent export order increments may moderately offset domestic weakness, easing downward pressure on the polyester yarn market.
But export orders have a transmission lag. In the short term, the weak supply-demand, high-price-spread pattern in the polyester chain will persist. Whether yarn prices can shed that near-RMB 1,000 premium depends on polyester plants' inventory digestion speed, weavers' replenishment willingness, and actual overseas order arrivals.