In the last two days of June 2026, polyester mills' promotional campaigns met unprecedented cold reception: the first day's production-sales ratio hovered at only 70%, and the next day it plummeted to around 30%. This is not an isolated weakness—past promotions, though often described as 'one-day wonders,' at least saw ratios easily exceed 100%. Now, even that brief euphoria has vanished. The market is sinking into a deep 'promotion fatigue,' rendering polyester mills' discount strategies ineffective.
The Cost Ceiling Lowers
A key variable driving this shift is the systematic downward revision of crude oil price expectations. Morgan Stanley cut its oil price forecast again within about two weeks, stating that market focus has returned from geopolitical conflicts to global oversupply. It expects average Brent crude prices of $75 per barrel for both Q3 and Q4. After the Strait of Hormuz blockade was lifted, stranded tankers are gradually departing, providing a substantial short-term relief to the energy crisis. This means the cost pressure on polyester filament yarn has sharply eased—making it unlikely to see the extreme price surges of over 50% in a few days that occurred after the 2026 Spring Festival.
For polyester mills, the weakening cost support reduces their confidence to proactively raise prices, and also makes the habitual 'promotion' tool less attractive. With the cost 'ceiling' lowered, the core of the industry chain game has shifted entirely to the demand side.
Downstream Weaving: Extreme Rationality and Low Inventories
The reality on the demand side is even harsher. Downstream weaving mills have entered a state of extreme rationality: they refuse to start machines without confirmed orders. Margins have been squeezed over the past two years, drastically reducing companies' room for maneuver, and operating flexibility is very poor. Price elasticity for fabrics is also weak—the breakeven point between inventory greige goods and fresh production is still under negotiation, with the market lacking clear directional signals.
Polyester mill inventory data reveals the severity of the supply-demand imbalance. As of late June, POY, FDY, and DTY inventories stood at 30, 35.7, and 41.8 days respectively, and are still accumulating. If downstream continues to refuse large-scale purchases, polyester filament yarn may face sustained price declines, or force factories into a more aggressive clearance sale.
Variables for a Market Rebound: Hit Products and Seasonal Mismatches
The entire textile market is waiting for a clear signal to start. Historical experience shows that the emergence of hit product categories can break the deadlock—for example, the demand pulse driven by 'new Chinese-style' fabrics after the 2025 Spring Festival. In the short term, summer sun-protection clothing was the most likely trigger, but in 2026, heavy rainfall across China has delayed high temperatures, significantly postponing sun-protection demand.
A more noteworthy window is in the second half of the year. Because both upstream and downstream are cautious in stocking, and capacity utilization has been limited in the first half, market inventories are relatively low compared to the past two years. Once demand recovers, supply-demand mismatches could occur in the short term, restoring price elasticity for fabrics.
Risk Warning: Tougher Markets Call for Vigilance on Payments
The months of May and June have not been easy for textile professionals. The 'golden March-April' peak season for the polyester chain is long gone, and the 'golden September-October' period still seems distant. In a persistently weak market, the probability of 'shady practices' increases. Textile companies need to stay alert and constantly monitor payment security, avoiding the amplification of credit risk in pursuit of orders.