When international crude oil briefly dipped below $70 per barrel on June 24, returning to pre-Middle East conflict levels, the textile chemical fiber market showed a peculiar disconnect: polyester filament yarn prices remained nearly 1,000 yuan per ton higher than before the conflict. This price gap is not a simple cost pass-through but a deep-rooted game between upstream and downstream amid supply-demand imbalance.
The Broken Transmission Chain
From a futures perspective, PTA and MEG prices have largely returned to their pre-rally levels, theoretically removing the cost support for polyester filament. However, polyester plants have not followed suit with significant price cuts. On June 24, only minor reductions of 50-150 yuan per ton were observed, far from bridging the 1,000-yuan gap.
The core issue lies in inventory. Data shows POY inventory at 30 days, FDY at 35.7 days, and DTY at 41.8 days. These inventories were produced at higher oil prices. A substantial price cut would turn paper losses into real losses. With operating rates at only 73.81%—a three-year low—polyester plants face limited sales pressure and prefer a 'slow decline, slow sales' strategy to buy time.
The Weavers' Dilemma: High Cash Flow, Low Buying Urgency
For weaving mills, the high cash flow of polyester filament (the margin between raw material cost and selling price) has become a reason to wait. The logic is straightforward: if PTA and MEG have already returned to their starting points, polyester filament should have room to fall further. Purchasing now could mean a cost difference of hundreds of yuan per ton in a month, for the same final product.
Consequently, mills have adopted a 'buy only when necessary' approach. Unless they have confirmed orders to fulfill, they prefer to maintain low inventory and avoid the risk of price depreciation. This collective wait-and-see attitude further suppresses demand, adding pressure on polyester plants' inventory.
Anomalous Weather and Demand Divergence
The root of the supply-demand imbalance is weak demand. Summer is typically peak season for sun-protection fabrics, but unusually cool weather near July has delayed the seasonal uptick. Domestic demand contraction directly reduces the absorption of polyester filament.
However, export markets show a glimmer of hope. With the full reopening of the Strait of Hormuz shipping channel, global crude oil and commodity trade is normalizing. Faster economic recovery in several overseas economies could boost international textile consumption. If these incremental orders materialize, they could partially offset domestic weakness and provide a floor for polyester prices.
Short-Term Outlook: A Stalemate of Weak Demand and Wide Spreads
In the near term, the pattern of 'weak supply-demand, wide price spreads' in the polyester chain is unlikely to break. Polyester plants hold high-cost inventory and are reluctant to cut prices; weaving mills watch for cash flow and wait for lower prices. Both sides are testing each other's patience.
Market participants should watch two key variables: first, whether crude oil can stabilize around $70, which would determine if further cost-side collapse is possible; second, whether export order increments materialize in July-August, which could be the external force needed to break the current deadlock.