International crude oil prices have fallen back to levels seen before the escalation of the Middle East crisis, yet the polyester filament market tells a different story. On June 24, WTI crude briefly dipped below $70 per barrel. Although it rebounded slightly due to renewed geopolitical tensions, it has essentially returned to its pre-crisis range. However, polyester filament yarn prices remain nearly 1,000 yuan per ton higher than before the crisis. This divergence reflects a deep tug-of-war between polyester plants and weavers over inventory costs, cash flow, and demand expectations.
The Cost and Inventory Standoff
From the raw material side, PTA and MEG futures have largely returned to their pre-crisis levels, theoretically removing the cost support for polyester filament. But the reality for polyester plants is more complex. Current POY inventory stands at about 30 days, FDY at 35.7 days, and DTY at 41.8 days—all produced at much higher raw material costs than today's spot prices. If plants were to cut prices in line with oil, they would turn paper losses into realized losses. Therefore, despite still-healthy paper cash margins, plants prefer to reduce prices slowly and control sales pace rather than release the full decline at once.
Meanwhile, capacity utilization remains low at 73.81%, only 0.29% higher than the previous week and near a three-year low. This low operating rate means polyester plants face no urgent need to sell, supporting their 'slow reduction' strategy. For weavers, however, this high cash margin is a signal to wait: with raw material prices likely to fall further, they postpone purchases unless they have firm orders, avoiding inventory depreciation.
Demand: Weak Domestic vs. Glimmer of Export Hope
The core contradiction in the chain is weak demand relative to supply. Summer should be peak season for sun-protection fabrics, but unseasonably cool weather has delayed the expected demand surge. This domestic weakness has reinforced weavers' wait-and-see attitude, creating a 'buy-only-when-needed' environment.
However, overseas markets are showing positive signs. With the full reopening of the Strait of Hormuz shipping lanes, global crude and commodity trade is stabilizing, and multiple overseas economies are accelerating recovery. This trend is expected to boost international demand for textile products, providing support for Chinese textile exports. The increase in export orders may partially offset the downward pressure from weak domestic demand, alleviating the supply-demand imbalance in the polyester filament market.
Short-Term Outlook: Weak Supply-Demand, Wide Price Gap to Persist
Overall, the polyester chain is unlikely to escape the 'weak supply-demand, wide price gap' pattern in the near term. Polyester plants are constrained by high-cost inventory, limiting their room to cut prices, while weavers await a lower entry point. This tug-of-war will continue to dominate market direction. For participants, the key is to judge when and how this price gap will close. If crude remains low and end-demand fails to recover, inventory pressure on polyester plants will build, eventually forcing faster price cuts. Conversely, if export orders surprise on the upside, it could inject a variable into the current stalemate.