Oil Prices Return to Pre-Crisis Levels, but Polyester Filament Still Holds a Thousand-Yuan Premium: A Critical Phase of Supply-Demand Standoff

Oil prices have fallen back to pre-crisis levels, yet polyester filament yarn still carries a premium of nearly 1,000 yuan per ton compared to before the Middle East tensions escalated. On June 24, WTI crude briefly dipped below $70, erasing all gains since the geopolitical turmoil began. By June 26, oil was still hovering around $70. Meanwhile, polyester filament prices remain stubbornly high.

This price gap reflects a tug-of-war between polyester producers and weavers over cost, inventory, and expectations.

Raw materials have returned to square one—why hasn't polyester followed?

From a futures perspective, PTA and MEG prices have essentially fallen back to pre-surge levels. Conventional logic would suggest that polyester filament's cost support has weakened significantly, and prices should follow suit. But reality is different: polyester mills are in no hurry to cut prices.

The reason lies in the timing of inventory. Current inventories stand at 30 days for POY, 35.7 days for FDY, and 41.8 days for DTY. Most of this stock was produced when oil and raw material costs were high. If mills were to slash polyester prices back to pre-crisis levels, they would turn paper losses into real losses—losing hundreds of yuan per ton sold.

With operating rates already at a three-year low (73.81%), mills have no urgent need to clear inventory quickly. Their strategy is to lower prices gradually, controlling the pace of decline.

Weavers: 'No buy unless necessary,' waiting for cost reset

For weaving mills, the current 'high cash margin' on polyester filament signals further downside potential. Unless they have urgent orders to fulfill, they prefer to wait a month—because a month's delay could mean a cost difference of several hundred to over a thousand yuan per ton, while the final fabric price may not rise in sync.

This 'wait-and-see' attitude is widespread across textile clusters in Jiangsu and Zhejiang. Weavers are operating at low utilization rates and keeping minimal raw material inventories, effectively shifting the inventory burden back to polyester mills.

Weak demand is the root cause; weather and exports are wild cards

The core reason for the industry chain divergence remains weak end-user demand. Summer is typically peak season for sun-protection fabrics, but unusually cool weather has delayed the season's start. The sluggish domestic market leaves weavers with little incentive to restock.

However, there are bright spots. The Strait of Hormuz shipping channel has fully reopened, restoring global crude and commodity trade flows. Several overseas economies are accelerating their recovery, which could boost international textile consumption. Increased export orders may partially offset domestic weakness and provide some support for polyester filament prices.

Practical advice

For buyers - Polyester prices will likely continue to decline slowly. For urgent orders, purchase in batches to avoid buying at a peak. - Monitor polyester mill production cuts and inventory changes. If inventories keep rising and cuts deepen, the downside may be limited. - For standard grades, extend procurement cycles to wait for cost resets.

For exporters - Overseas demand recovery signals are worth watching, especially orders from Europe and Southeast Asia. Consider locking in current raw material costs for autumn/winter fabric orders. - Exchange rate fluctuations combined with raw material price gaps require flexible pricing. Negotiate floating price clauses with clients to hedge against volatility. - Track logistics costs following the Strait of Hormuz reopening, as they will affect overall export supply chain stability.