The global energy and chemical supply chain has received a short-term but clear positive signal. Iran announced 60 days of free transit for commercial vessels through the Strait of Hormuz, canceling additional fees, easing pressure on this critical waterway that carries about one-third of global crude oil shipments. Following the policy, Brent and WTI crude oil prices dropped sharply, quickly erasing geopolitical risk premiums, opening a rare cost-recovery window for the long-stressed chemical fiber and textile industry.
Cost Transmission: Rapid Easing from Oil to Chemical Fibers
The oil price decline has quickly transmitted down the supply chain. Prices of key chemical fiber raw materials such as PX, MEG, and methanol have loosened accordingly, relieving domestic chemical fiber companies that had suffered from low raw material inventories and high prices due to channel congestion. China's chemical fiber raw materials heavily rely on imports from the Middle East, and smooth shipping means low-cost raw materials are arriving in batches, significantly reducing procurement costs. This change is directly reflected in mainstream products like polyester, PET, and nylon—they have stabilized and even shown tentative price increases.
For the chemical fiber industry, which has long faced the dual pressures of high costs and weak demand, the easing on the cost side is a timely relief. Previously, companies had conservative operating rates, high finished product inventories, and thin profit margins. Now, with weakening cost support, profit statements are expected to be repaired in the short term. Industry public data shows that the average gross margin of chemical fiber companies in the past quarter has fallen to a three-year low, and this cost decline will at least ease corporate cash flow pressures.
Downstream Textiles: Restocking Willingness Rises, but Demand Remains Weak
The effect of cost dividends on the downstream has already been seen. In the first half of the year, textile end-users generally lacked orders, with a strong wait-and-see sentiment, and companies mainly replenished in small batches based on rigid demand. As chemical fiber costs steadily decline, the willingness of small and medium-sized textile companies to restock has significantly improved, and market transaction activity has picked up. This round of restocking has driven up production and sales data across the entire chain, creating space for home textiles, apparel, and other terminal categories to offer promotions and boost consumption during the upcoming autumn-winter preparation season.
However, it must be pointed out that the recovery of domestic and foreign textile demand remains weak. According to public data from the National Bureau of Statistics, the operating revenue growth rate of textile companies above designated size in the first five months of 2026 was less than 3%, far below the historical average for the same period. Cost dividends are more about repairing corporate profits than stimulating demand expansion. There has been no fundamental improvement in terminal consumer purchasing power, meaning raw material price cuts are unlikely to directly translate into order increases. The industry as a whole is still undergoing structural repair.
Policy Window Limited: Uncertainty After 60 Days
This shipping benefit is essentially a short-term policy—after the 60-day free transit ends, there is great uncertainty regarding shipping rules and geopolitical dynamics. The stability of shipping through the Strait of Hormuz has always been closely tied to Middle Eastern political games. If the policy expires without extension, crude oil supply may tighten again, and oil price rebounds will quickly compress the current cost-repair space.
More concerning is that even if oil prices remain low, whether the chemical fiber industry can continue to benefit depends on the pace of end-demand recovery. Currently, global economic growth is slowing, trade frictions are recurring, and textile foreign trade orders are recovering weakly. If demand does not pick up, cost dividends will only turn into price wars among companies, ultimately squeezing overall industry profits.