The 60-day free transit policy at the Strait of Hormuz is injecting a short-term boost into the global chemical fiber and textile supply chain. After Iran announced the removal of commercial vessel surcharges, international oil prices rapidly shed geopolitical risk premiums, with Brent and WTI crude continuously declining. This shift directly transmitted to chemical fiber upstream, easing prices for key raw materials like PX and MEG, and opening a cost-down window for polyester, nylon, and other mainstream products that had long been under pressure.
Cost Side: Raw Material Prices Soften, Margins Temporarily Recover
Previously, disrupted shipping at the Strait of Hormuz kept crude and chemical raw material prices elevated. Chinese chemical fiber enterprises, heavily reliant on Middle Eastern imports, saw feedstock inventories drop to low levels and margins severely squeezed. Now, with the channel clear and low-cost cargoes arriving, upstream cost pressure has significantly eased. Industry data shows PX and MEG prices have corrected notably, while polyester chip and filament yarn have stabilized. For chemical fiber firms trapped in a 'high cost, weak demand' dilemma, this is a rare breather.
However, this cost recovery is primarily a short-term supply-side improvement. Once the 60-day policy window ends, shipping rules and geopolitical tensions may shift again, potentially pushing oil prices higher. Therefore, the current phase is better suited for optimizing inventory structure and repairing margins, rather than blindly expanding production.
Midstream Transmission: Polyester and Nylon Stabilize, but Supply-Demand Balance Remains Unchanged
Cost dividends are steadily passing downstream. Mainstream chemical fiber products like polyester, nylon, and spandex have shown signs of stabilization after a prolonged decline. Some weaving mills have started to increase raw material stocking, boosting market activity. However, this uptick is more of a bottom-fishing restocking behavior than a substantive increase in end-demand.
First-half 2026 saw sluggish order-taking across the textile chain, with weak domestic and foreign demand recovery. Home textile and apparel brands mainly procured on a need-to basis. Even with lower chemical fiber costs, end-product price competition remains fierce. This means cost dividends can only partially translate into industry profits, mostly helping firms maintain operating rates at low levels and avoid mass shutdowns. The industry remains in a destocking cycle, and a full supply-demand recovery still awaits consumption rebound.
Downstream Market: Small Mills Increase Restocking, but Caution Prevails
For small and medium textile mills, lower raw material prices directly reduce production costs. Restocking demand that had been on hold is now being released. Some mills have started small-lot purchases of polyester and nylon yarns for autumn/winter orders. Yet overall, restocking remains need-based, with little appetite for large-scale hoarding.
This cautious stance reflects industry skepticism: the 60-day policy window is too short, and raw material prices could reverse anytime. Meanwhile, end-orders show no significant growth, and foreign trade remains clouded by geopolitical and currency uncertainties. Thus, downstream mills prefer a 'short and fast' approach—moderate restocking, quick turnover—to avoid inventory write-down risks.