Crude oil futures have fallen back to levels seen before the escalation of the Middle East crisis, yet polyester filament yarn remains nearly 1,000 yuan per ton higher. On June 24, WTI crude briefly dipped below $70, and despite a rebound on the 25th due to geopolitical news, it hovered around $70 again on the 26th. Meanwhile, the decline in polyester yarn prices has lagged significantly, pushing the industry into a critical phase of upstream-downstream negotiation.
Oil Returns to Origin, Polyester Price Gap Hangs
Public futures data shows that PTA and ethylene glycol have largely fallen back to their pre-rally starting points, but polyester filament yarn retains a premium of about 1,000 yuan per ton. This leaves polyester plants with considerable theoretical cash flow—an apparent profit margin based on current raw material costs. However, this high cash flow is not a healthy signal; instead, it reflects deep divergence between upstream and downstream players.
For weaving mills, high cash flow implies ample room for polyester prices to fall. With insufficient orders on hand, buyers have adopted a "buy only when necessary" strategy, delaying purchases to wait for further price declines and avoid inventory losses. This cautious sentiment is particularly evident in textile clusters like Shengze and Changxing, where loom utilization rates remain low and restocking appetite is weak.
Polyester Plants' Inventory Dilemma
Polyester plants face a more complex situation. Despite attractive paper cash flows, the production cost of their existing inventory is high. Industry data shows current inventory days: 30 for POY, 35.7 for FDY, and 41.8 for DTY. Most of this stock was produced during the high-oil-price period, meaning significant price cuts would turn unrealized losses into real ones.
As a result, major polyester producers are maintaining price stability through low operating rates. Longzhong data indicates that on June 24, domestic direct-spun polyester filament capacity utilization was only 73.81%, near a three-year low. While output cuts help manage inventory, they cannot reverse the supply-demand imbalance. Rumors of further production cuts serve more as expectation management than a turning point.
Weak Domestic Demand vs. Export Relief
The root cause of the current chain divergence is weak supply-demand dynamics and lackluster domestic consumption. The expected summer boom for sunscreen fabrics has failed to materialize due to unseasonably cool weather, delaying or reducing related orders. This directly suppresses weaving mills' purchasing power and dilutes the impact of polyester plant cuts.
However, external conditions are improving. With the Strait of Hormuz shipping channel fully reopened, global crude and commodity trade is normalizing, and multiple overseas economies are accelerating recovery. This could boost international textile demand, providing support for China's textile exports. If export orders can offset domestic weakness, downward pressure on polyester yarn prices may ease.
Short-Term Game Continues, Price Gap to Narrow Slowly
In summary, the "weak supply-demand, high price gap" pattern in the polyester chain is unlikely to break soon. Polyester plants struggle to balance inventory costs with cash flow, while weaving mills hold cash waiting for lower prices. The upstream-downstream tug-of-war will dominate market trends, and polyester price adjustments are likely to be gradual rather than sharp.