Crude Oil Returns to $70, Polyester Filament Holds a Thousand-Yuan Premium: Supply Chain Enters Critical Game Period

Crude oil has fallen back to pre-crisis levels, but polyester filament yarn still carries a near-thousand-yuan premium. On June 24, WTI crude briefly dipped below $70/barrel, returning to levels last seen before the escalation in the Middle East. Although prices rebounded slightly on the 25th due to geopolitical news, they hovered around $70 again on the 26th. Meanwhile, polyester filament yarn prices remain nearly 1,000 yuan per ton higher than before the crisis. This price gap is tearing apart expectations and behavior across the supply chain.

Price Scissors: Futures Back to Square One, Spot Still Elevated

PTA and ethylene glycol futures have largely retraced their gains from the recent rally, but spot polyester filament prices have lagged in their decline. At current spreads, polyester plants enjoy substantial cash margins. However, this paper profit is locked by two factors: high-cost inventory (POY 30 days, FDY 35.7 days, DTY 41.8 days) and a capacity utilization rate of only 73.81%, near a three-year low, reducing the urgency to destock. Cutting prices would turn unrealized losses into realized ones, so mills prefer to lower prices gradually and sell slowly.

The Weaver's 'Buy Only When Necessary' Stance

For weavers, the high cash margin on polyester filament signals significant room for further price declines. If they are producing only for routine inventory, buying a month earlier could mean a cost difference of hundreds or even thousands of yuan per ton for the same fabric. As a result, unless they have firm orders to fulfill, weavers generally adopt a 'buy only when necessary' wait-and-see approach. This mindset further reduces liquidity for polyester filament and makes it harder for plants to relieve inventory pressure through price cuts.

Core Contradiction: Weak Demand vs. Supply Glut

The root of the supply chain divergence is weak domestic consumption. Summer is typically the peak season for sun-protection fabrics, but unseasonably cool weather has delayed order starts. Weak domestic demand, combined with weavers' destocking intentions, leaves polyester filament without strong support. However, there are signs of change. The Strait of Hormuz shipping channel has fully reopened, global crude and commodity trade is normalizing, and several overseas economies are accelerating their recovery, which could boost international textile demand. Export orders may partially offset the domestic shortfall.

Near-Term Outlook: Stalemate Under Weak Supply-Demand and High Spreads

In the coming weeks, the polyester chain will likely maintain a pattern of 'weak supply-demand, high spreads.' Plants will continue low-load production to slow price declines, while weavers wait for better buying opportunities. The stalemate could break if export orders pick up or weather-driven domestic demand emerges. But if demand remains sluggish, polyester filament prices will eventually converge with crude and feedstock levels, and the thousand-yuan premium is only a matter of time before it erodes.

Practical Recommendations

For Buyers - For non-urgent orders, continue to wait; each week of delay could reduce costs by 100-200 yuan/ton. - For orders with firm delivery dates, consider splitting purchases into small batches to avoid chasing prices during rebounds. - Monitor polyester plant inventory days; if POY inventory exceeds 35 days, active price cuts may follow.

For Exporters - With clear signs of overseas economic recovery, engage with clients early on Q3 orders to lock in current low feedstock costs. - Use currency volatility windows to sign forward export contracts during RMB depreciation phases to boost margins. - Watch for textile demand recovery in the Middle East region after the Strait of Hormuz reopening, which could become a new growth market.