Crude oil prices surged on the evening of June 30, with Brent climbing over 1% and WTI briefly touching $71 per barrel. For the textile industry, this is far from a routine energy headline—it directly rewrites the cost equation for the entire chemical fiber supply chain.
Cost Transmission: From Crude to Grey Fabric
Every $1/bbl increase in crude raises PX production costs by approximately 35-40 yuan/ton, and PTA costs by 25-30 yuan/ton. Polyester filament yarn, the most widely used raw material in weaving, is tightly linked to PTA pricing. Based on current POY 150D/48F prices averaging around 7,200 yuan/ton, this crude spike will lift polyester yarn costs by an estimated 150-200 yuan/ton.
A medium-sized weaving mill in Shengze reported receiving price hike notices from multiple polyester plants on the evening of June 30, covering FDY, DTY and other conventional grades. Data from Keqiao Light Textile City showed that inquiries for polyester grey fabrics rose 18% overnight, though actual transaction volumes did not keep pace—buyers and sellers are locked in a price discovery standoff.
Short-Term Impact: Weaving Margins Squeezed, Inventory Values Reappraised
For weaving mills, raw material cost increases rarely pass through fully to grey fabric prices in the near term. Conventional products like 210T taffeta and 75D chiffon operate on thin margins of just 0.5-1.5 yuan/meter. If this polyester cost hike cannot be passed along, per-meter profits could contract by 30-50%.
Conversely, mills holding raw material inventories will see paper gains. A large home-textile grey fabric trader in Nantong revealed that its polyester inventory locked in mid-June has already generated a floating profit of about 2%. This may push more companies to shift from just-in-time purchasing to forward price-locking, concentrating order flows at polyester plants.
Medium-Term Variable: Forcing Product Mix Upgrades
Higher oil prices are not entirely negative for textiles. Historical data shows that during 2018-2019, as crude fell from $75 to $50/bbl, the average export price of chemical fiber fabrics actually rose from $1.2/m to $1.35/m—the cost windfall was reinvested into product upgrading rather than price competition.
If this crude spike persists, it will accelerate divergence between two groups:
- Conventional products (taffeta, pongee) will see further margin compression, with capacity migrating to lower-cost regions (northern Jiangsu, Anhui);
- Differentiated products (recycled polyester, cationic dyeable, functional coated fabrics) will gain share due to stronger pricing power.