The sharp drop in oil prices has not brought the expected 'cost dividend' to the polyester industry chain; instead, it has pushed upstream, midstream, and downstream players into a more intense game. As the Strait of Hormuz gradually resumes navigation, international oil prices have fallen back to pre-war levels, but polyester filament prices have not followed suit. Downstream weaving mills are generally in a 'loss on every order' situation, while filament producers have built a profit fortress through production cuts. This game over volume, price, and profit is testing the patience and strategies of all links in the chain.
The Three-Way Demands: Who Is Making Whom Uncomfortable?
The core contradiction in the current industry chain lies in the irreconcilable demands of the three parties. Upstream PTA and PX plants conducted large-scale maintenance in July, reducing operating rates. However, after August, as shipping in the strait recovers and refinery maintenance ends, raw material supply pressure will gradually ease. The upstream's core desire is for filament producers to increase operating rates, thereby driving direct demand for PTA, accelerating destocking, and repairing the forward balance sheet. However, the only lever to boost filament operating rates is promotional price cuts—the upstream is hoping filament producers will lower prices to stimulate sales.
Midstream filament producers have a completely different logic. In past years, each time raw material prices fell, they rushed to cut prices to promote sales, squeezing processing margins and becoming mere 'porters' for the upstream. Now, they are determined to protect the profit bottom line they have painstakingly built. Production cuts have become a key tactic: previously, full-load production yielded only 100 yuan per ton; now, with operating rates at 70%, they earn 500 yuan per ton. Once prices are lowered, it would not only trigger deeper downstream wait-and-see behavior—fearing that 'if it can drop today, it can drop again tomorrow'—but also undo all previous production cut efforts.
Downstream weaving mills are in the most painful position. Before the oil price crash, they suffered from a 'flour more expensive than bread' dilemma—high upstream filament prices but inability to raise final product prices, leading to widespread losses on current orders. After the oil crash, polyester raw material costs collapsed, offering a glimmer of hope, but filament prices remained stubbornly high. The downstream believes the current high processing margins in the filament segment are unreasonable. This 'upstream eats meat, downstream drinks soup but gets burned' situation has led them to wait for filament prices to 'catch down' to reasonable levels before restocking.
The Stalemate: Who Will Blink First?
This game has formed a classic 'prisoner's dilemma.' Filament producers won't lower prices much, so downstream won't buy; sales volumes stay low; inventory won't drop; operating rates can't rise; and upstream PTA can't sell, failing to accelerate destocking. Currently, no party is willing to make the first move, leaving the industry chain deadlocked.
Historically, such price standoffs typically end when one party is forced to compromise due to inventory pressure or cash flow strain. The key variable now is time: the downstream's inventory digestion capacity, the filament producers' cash flow endurance, and the pace of upstream PTA supply recovery. If the downstream's 'waiting game' drags on, filament inventory pressure will mount, eventually forcing price cuts to boost sales. Conversely, if upstream raw material supply recovery is slower than expected, filament producers may have more leverage to maintain high prices.
Impact on Procurement and Foreign Trade
For fabric and garment buyers, the current situation means increased uncertainty in raw material costs in the short term. Stubborn filament prices may prevent finished fabric prices from falling quickly, while downstream mills' wait-and-see attitude could affect delivery lead times. Foreign trade companies should be particularly cautious in order pricing, avoiding long-term fixed-price contracts during periods of raw material price volatility.