Brent crude oil briefly dipped below $70 per barrel on June 24, completely erasing all geopolitical premiums accumulated since the escalation of the Middle East crisis in late 2025. However, the polyester filament yarn market has not followed suit. Current average prices for POY, FDY, and DTY varieties remain nearly 1,000 yuan per ton higher than pre-crisis levels. This widening price gap between raw materials and finished products is creating a delicate tug-of-war within the industrial chain.
The Root of the Gap: Cash Flow vs. Inventory
From the profit-and-loss perspective of polyester plants, the immediate cash flow for polyester filament yarn is indeed at a multi-year high. PTA and ethylene glycol futures have largely returned to pre-crisis price levels, meaning that, based on current raw material costs, the theoretical processing margin for polyester yarn is quite attractive. However, a key variable lies between book profit and actual profit: inventory cost.
According to publicly available industry data, as of late June, POY factory inventory stood at approximately 30 days, FDY inventory at 35.7 days, and DTY inventory as high as 41.8 days. A significant portion of this inventory was produced and stored when crude oil was trading above $80 per barrel, meaning its actual raw material cost is far higher than current futures prices. If polyester plants were to slash prices in line with the crude oil decline, they would turn unrealized losses into realized losses. With capacity utilization at only 73.81%—a near three-year low—and no urgent need to liquidate inventory, plants naturally prefer a "slow price cuts, slow sales" strategy to buy time.
Downstream Wait-and-See: Buy Only When Necessary
For weaving mills, the high cash flow of polyester yarn signals ample room for further price declines. The logic is simple: if PTA and ethylene glycol have already returned to pre-crisis levels, why should polyester yarn retain a 1,000 yuan premium? This expectation gap has directly altered purchasing behavior.
Weavers are currently adopting a "buy only when necessary" inventory strategy. Unless they have orders with confirmed delivery dates, they prefer to keep raw material inventories low rather than risk holding stock that could depreciate. A one-month difference in purchasing timing could mean a price difference of several hundred or even over a thousand yuan per ton, yet the final product's selling price will not be higher just because the raw material was bought at a higher cost. This cautious sentiment, in turn, suppresses polyester plants' shipment volumes, creating a stalemate characterized by low transaction volumes and slow price declines.
Demand Side: Uneven Recovery
The fundamental driver of the divergence in this industrial chain is weak demand relative to supply. On the domestic front, a typical case is the delayed peak season for sunscreen fabric. Historically, June marks the peak production and sales season for sunscreen fabrics. However, this year, unseasonably cool temperatures have pushed back the stocking schedules of downstream garment brands, delaying the release of related chemical fiber demand.
On the export side, marginal improvements are emerging. With the full reopening of shipping lanes through the Strait of Hormuz, global crude oil and commodity trade order is gradually normalizing, and the pace of economic recovery in several overseas economies is accelerating. This could support Chinese textile export orders and partially offset domestic demand weakness. However, the transmission from inquiry to actual order placement typically takes 2-3 months, making it unlikely to reverse the weak polyester market trend in the near term.