Crude Oil Plunges $2: Textile Cost Side Sees a Short-Term Relief Window

On July 1, international oil prices suffered a heavy blow, with Brent crude falling more than $2 intraday to a low of $71.39 per barrel, a drop of 2.73%. WTI crude also weakened, falling below $68.22 per barrel, its lowest level since February 27. This oil price collapse is not an isolated event but the combined result of global energy supply-demand rebalancing and weakening macroeconomic expectations.

Cost Transmission and Chain Impact

For the textile industry, crude oil prices anchor the cost of the chemical fiber chain. A $1 drop in Brent crude theoretically reduces PX costs by about 30-40 yuan per ton, which then transmits to PTA and polyester filament. With Brent falling over $2 intraday, PTA production costs could decrease by 60-80 yuan per ton, opening up room for concessions in polyester staple fiber and filament. Historically, a single-day oil price drop of over 2% often triggers a 'wait-and-see' sentiment in the polyester sector, causing downstream weaving mills to slow purchasing and wait for further raw material concessions.

Notably, this oil price decline occurred after the release of the U.S. EIA inventory report, which showed a smaller-than-expected reduction in U.S. oil inventories, reflecting weaker-than-anticipated actual demand. This signal is particularly important for textile foreign trade companies: weak global energy demand often correlates positively with end-consumer spending, suggesting that the recovery pace of apparel procurement in European and American markets may be further delayed.

Industrial Cluster Response and Procurement Strategy

Looking at major domestic textile clusters, such as Shengze, Keqiao, and Changxing, which are concentrated on polyester consumption, the current weaving loom operating rate has fallen from a peak of 85% to around 78%, with some small and medium-sized enterprises facing significant inventory pressure. The oil price crash will accelerate promotional price cuts by polyester plants in the short term, but downstream fabric merchants and garment makers are likely to adopt a 'sell-and-buy' strategy, avoiding blind stockpiling just because raw material prices have fallen. After all, the recovery of end-user orders remains the fundamental factor determining purchase volumes.

Operational Recommendations

For Buyers - Extend the inquiry cycle moderately in the short term, waiting for polyester plants to release price reduction space, but avoid excessive price suppression that could lead to supplier reluctance to sell. - Monitor changes in PTA futures and spot basis; if the basis weakens, consider point-price procurement to lock in lower-cost supply.

For Foreign Trade Companies - Under the current dual volatility of exchange rates and oil prices, include raw material price linkage clauses in contracts with overseas customers to prevent profit erosion from one-sided fluctuations. - Use the low oil price window to negotiate long-term contract price adjustments with chemical fiber suppliers, aiming for a more favorable quarterly pricing benchmark.