Entering the second half of 2026, the game in the polyester supply chain is fully exposed. A series of promotions has met with increasingly indifferent market responses. On June 29, polyester factories offered significant discounts, but the daily sales-to-production ratio hovered around 70%; the next day it quickly fell to around 30%. Compared with previous rounds of promotions, which were often one-day wonders but at least saw ratios exceed 100%, the current situation marks a clear state of 'promotion fatigue'.
Cost Ceiling Lowers
The first structural change comes from the upstream cost side. Although the situation in the Middle East is not fully resolved, the closure of the Strait of Hormuz has been lifted, and oil tankers stranded in the Persian Gulf are gradually departing. The energy crisis has eased in the short term. International oil prices are unlikely to surge 50% in a few days as they did after the Spring Festival. Morgan Stanley has again lowered its oil price forecast within about two weeks, shifting focus back to global oversupply. It expects average spot Brent crude prices of $75 per barrel for both Q3 and Q4. This means the cost pressure on polyester filament yarn has dropped significantly, making a repeat of the 'crazy bull' market of early March unlikely.
For polyester factories, high-cost raw material inventories are still being digested—POY, FDY, and DTY inventories stand at 30 days, 35.7 days, and 41.8 days, respectively, and are still accumulating. While cost support weakens, factories lack the incentive to cut prices aggressively due to their high-cost inventory. This scissors gap between 'high-cost inventory' and 'weak demand expectations' is the root of the polyester industry's current dilemma.
Downstream 'Extreme Rationality'
Changes on the demand side are even more noteworthy. Downstream weaving companies have become extremely rational—refusing to start machines without confirmed orders. Margins have been squeezed too low over the past two years, drastically reducing firms' room for maneuver and making production flexibility very poor. Price flexibility in the grey fabric market is also weak, with the breakeven point between inventory fabric and fresh grey fabric still under negotiation.
This rationality is rooted in painful industry lessons. During 2023-2024, many weaving companies fell into inventory traps due to blind stockpiling, with profits largely eroded. Now, even when polyester factories offer discounts, weavers 'won't even bother to look'—unless there are clear end-order supports.
H2: Low Inventories as a Rebound Trigger
But there is another side to the coin: opportunity. Currently, stockpiling across the entire textile supply chain is cautious, and capacity utilization in the first half has been relatively limited. Compared with the past two years, current market inventories are at relatively low levels. Once demand recovers—for example, if summer sun-protection clothing finally takes off due to hot weather, or the traditional peak season 'Golden September and Silver October' arrives—a short-term supply-demand mismatch could occur, restoring price elasticity for fabrics.
Historical experience shows that when both upstream and downstream inventories are low, marginal improvements in demand can often trigger price increases far exceeding expectations. The explosion of 'New Chinese-style' fabrics after the 2024 Spring Festival is a typical case.
Risk Warning: Payment Safety Cannot Be Ignored
The months of May and June have not been easy for textile professionals. The 'Golden March and Silver April' are long gone, and 'Golden September and Silver October' is still far away. The worse the market, the higher the risks. Some companies may resort to desperate measures, such as low prices or even credit sales to grab orders. Textile practitioners must always watch for payment safety to avoid falling just before dawn.