Polyester Industry Enters 'Destocking Wait-and-See' Phase: Low Elasticity, High Inventories and Potential Price Flexibility in H2

In the final week of June 2026, a routine promotion by polyester factories yielded only a three-day cold response: sales-to-production ratio barely reached 70% on the first day, then plummeted to near 30% the following day. Compared to previous promotions where ratios easily exceeded 100% for a brief period, downstream mills now show little interest even in opportunistic restocking.

Promotion Fatigue and Inventory Pressure

The price-cutting strategy of polyester factories is losing effectiveness. In the past, promotions could at least generate one day of high sales; now even that short-term stimulus is failing. More concerning are the inventory figures: POY at 30 days, FDY at 35.7 days, and DTY at 41.8 days, all still climbing. Factories are reluctant to offer deeper discounts because their raw material costs remain relatively high, but if downstream mills continue to hold off, the industry may face two paths—either a steady price decline to clear stocks, or a more aggressive clearance sale.

Lower Cost Ceiling

Raw material support is weakening. With the Strait of Hormuz reopened and stranded tankers leaving, the energy crisis has eased short-term. Morgan Stanley has again lowered its oil price forecast within two weeks, shifting focus back to global oversupply, predicting Brent crude at $75 per barrel for Q3 and Q4. This means cost pressure on polyester filament is significantly reduced, making a repeat of the 50% surge seen after the Lunar New Year unlikely. For mid- and downstream textile firms, this may offer a relatively stable window, but also signals the end of cost-driven price rallies.

Demand Collapse and the Low-Inventory Paradox

Weaving mills have fundamentally changed their behavior. They refuse to run machines without confirmed orders. Two years of squeezed margins have left them with little flexibility, and fabric price elasticity is poor, with breakeven points for stock and fresh grey fabric still in negotiation. Yet a structural paradox exists: across the supply chain, both upstream and downstream are cautious about holding inventory, and H1 capacity utilization has been limited, leaving overall inventory near a two-year low. If demand recovers, supply-demand mismatches could occur in the short term, restoring price flexibility in fabrics.

Waiting for a Hit: Sunwear and Beyond

The market is waiting for a blockbuster product akin to last spring's 'New Chinese-style' fabrics. Short-term, summer sun-protective clothing is the most likely candidate, but heavy rainfall this summer has delayed high temperatures, pushing back demand. If no new hit emerges in H2, the industry may continue to drift in low elasticity.

Practical Recommendations

For Buyers - With high polyester inventory and factories eager to discount, consider phased, opportunistic restocking to avoid chasing highs. - Monitor weather and downstream orders; if sunwear or autumn/winter fabric demand picks up, lock in low prices early. - Beware of payment risks; in a weak market, default rates rise. Prioritize suppliers with strong credit history.

For Polyester Factories - Pure price cuts are ineffective; consider differentiated pricing or bundled services (e.g., payment terms, logistics) to stimulate orders. - With stable raw material costs, control operating rates to prevent further inventory buildup. - Watch the low-inventory downstream: if demand rebounds, supply-demand mismatches could create short-term price flexibility, so prepare capacity flexibility.