Crude oil prices have fallen back to levels seen before the escalation of Middle East tensions, yet polyester filament prices remain nearly 1,000 yuan per ton higher. This contrast reveals a concentrated struggle for pricing power along the textile chemical fiber supply chain.
Crude Returns, Filament Holds
On June 24, US WTI crude futures briefly dipped below $70 per barrel, erasing all gains from the recent geopolitical conflict. Despite a minor rebound on June 25 due to renewed tensions, prices fell back to around $70 on June 26. According to public industry data, this level fully matches the pre-crisis range.
However, polyester filament has not followed suit. Compared with pre-surge prices, it remains about 1,000 yuan per ton higher. While PTA and ethylene glycol futures have largely returned to their starting points, polyester filament retains significant cash margins. This means upstream cost pressures have eased substantially, but filament prices have not fully reflected the downside.
The Paradox of High Cash Flow and High Inventory
From the perspective of polyester mills, current cash margins on filament are quite attractive. The problem lies in inventory costs locked in during the high-price period. Public data shows POY mill inventory at about 30 days, FDY at 35.7 days, and DTY as high as 41.8 days. A sharp price cut would turn paper gains into real losses.
With capacity utilization near a three-year low (73.81% for direct-spun polyester filament on June 24), mills have no urgency to clear inventory. Their strategy is slow price reductions and slow sales, buying time.
For weavers, the situation is reversed. High cash margins imply future downside risk. Unless they have urgent orders, purchasing for stock could result in cost differences of hundreds or even thousands of yuan per ton within a month. The market has thus entered a "no buy unless necessary" wait-and-see mode.
This divergence in behavior leads to thin trading and price stalemate.
Supply-Demand Imbalance at the Core
Weak supply and demand, coupled with insufficient domestic consumption, are the root causes of this price divergence. The traditional summer season for sun-protective clothing has been delayed due to unusually cool weather, weakening weavers' restocking appetite.
However, external conditions are improving. With the Strait of Hormuz shipping channel fully reopened, global crude and commodity trade order is gradually restoring. Faster economic recovery in multiple overseas economies is expected to boost international textile consumption demand. For Chinese textile exporters, rising export orders may partially offset domestic weakness and support the polyester filament market.
In the short term, the pattern of weak supply-demand and high margins will persist. The tug-of-war between upstream and downstream will remain the key driver of market trends.