On July 1, 2026, the benchmark price of domestic polyester staple fiber (PSF) settled at 7,418.65 yuan/ton, a slight 0.02% decline from the beginning of the month. This price sits near the midpoint of the past year's range (6,267.17-8,426.02 yuan/ton), just about 1% above the median value of 7,346.6 yuan/ton. More notably, compared to the same period last year, the price has dropped 5.27% cumulatively.
Against the backdrop of widespread pressure on textile raw material prices, this signal from PSF reflects a deep-seated rebalancing occurring across the chemical fiber industry chain.
Cost Side: Squeezed PX-PTA Margins Transmitted Downstream
The primary raw material for PSF is PTA (purified terephthalic acid), which itself is highly dependent on PX (paraxylene). Over the past year, international oil prices have oscillated in the $70-80/barrel range, but the spread between PX and naphtha has narrowed from $350/ton in early 2025 to around $280/ton currently. This means profits in the PX segment have been significantly compressed, directly raising PTA production costs and subsequently squeezing PSF processing margins.
Annual data shows the PSF price bottom occurred in Q4 2025 (6,267.17 yuan/ton), when a concentrated release of new PTA capacity led to market oversupply. The peak of 8,426.02 yuan/ton appeared in late Q3 2025, driven by concentrated downstream stocking for the 'golden September and silver October' season, coupled with some plant maintenance. The current mid-range price is precisely the result of offsetting cost support and demand suppression.
Capacity Side: New Releases Coexist with Existing Competition
In the first half of 2026, the domestic PSF industry added approximately 450,000 tons of new capacity, mainly in Zhejiang and Jiangsu provinces. These new units are mostly large-capacity, low-energy continuous polymerization direct-spinning lines with single-line capacities generally exceeding 100,000 tons/year, giving them a clear cost advantage over traditional batch-type small capacities. Although the industry operating rate remains around 78%, the actual output from new capacity has pushed total market supply up by about 6%.
Meanwhile, operating rates at downstream pure polyester yarn and polyester-cotton blended yarn mills are only 65%-70%, lower than last year. Mid-year is a traditional off-season for textiles, and weaving mills are reluctant to build inventory, mostly purchasing on a need-to-use basis. The combination of increased supply and weakened demand has pushed PSF social inventories to around 25 days, about 5 days above normal levels.
Demand Side: Weak End-Use Consumption and Structural Divergence
From an end-product perspective, recovery in the apparel and home textile sectors has fallen short of expectations. In the first half of 2026, domestic retail sales of clothing, footwear, and textiles grew only 3.2% year-on-year, below the growth rate of total social consumer goods retail sales. On the foreign trade front, although exports of PSF and its products to Southeast Asia and South Asia maintained growth, the pace slowed from 12% in 2025 to about 7%, with some orders being replaced by local capacity in India and Vietnam.
Notably, the nonwovens sector emerged as a demand bright spot. Driven by demand for medical hygiene, filter media, and geotextiles, the use of PSF in spunlace, air-through, and other nonwoven processes increased by approximately 8% year-on-year. However, this segment accounts for only 15% of total PSF consumption, insufficient to offset weakness in traditional textile areas.
Price Outlook: Weak Short-Term Fluctuation, Possible Rebound in Q4
Overall, the current price of 7,418.65 yuan/ton is slightly above the midpoint, but lacks support for an upward breakout due to weak demand, while cost provides a floor against downside. In the short term (July-August), the price is likely to fluctuate narrowly in the 7,300-7,500 yuan/ton range. Entering September, with the start of the 'golden September and silver October' stocking cycle, prices could edge up to 7,600-7,800 yuan/ton. However, caution is warranted regarding supply pressure from continuous new capacity releases. If downstream demand recovery disappoints, prices may come under pressure again in the latter part of Q4.