The price gap between crude oil and polyester filament yarn is tearing apart the profit structure of the polyester industry chain. On June 24, U.S. WTI crude oil futures briefly fell below $70/barrel, returning to pre-Middle East crisis levels. Although a rebound occurred on June 25 due to geopolitical fluctuations, oil prices hovered near $70 again on June 26. Yet polyester filament yarn prices remain nearly 1,000 yuan/ton higher than before the crisis. This anomaly stems from a deep divergence between cost logic and supply-demand logic.
Roots of the Price Gap: Failed Cost Transmission and Inventory Cost Game
From the raw material side, PTA and MEG futures have essentially returned to pre-crisis levels, theoretically removing cost support for polyester filament. However, polyester plants face a different reality. Current operating rates for direct-spun polyester filament are only 73.81%, a three-year low. Low operating rates should help control inventory, but actual stock levels remain high: POY inventory stands at 30 days, FDY at 35.7 days, and DTY at 41.8 days. These high-cost inventories were produced when raw material prices were high. If polyester plants were to cut prices sharply now, they would turn paper profits into real losses. Hence, they prefer to lower prices gradually and sell slowly, trading time for space.
Weavers' Wait-and-See Logic: 'No Purchase Unless Necessary' Under High Cash Margin Expectations
For weaving enterprises, the current high cash margin of polyester filament implies significant room for future price declines. If there are no firm orders to fulfill, purchasing raw materials for stock production risks a cost difference of hundreds or even thousands of yuan per ton within a month, while the final product remains identical. This expectation has led to a 'no purchase unless necessary' procurement strategy. Weavers prefer to wait for further price drops rather than risk inventory depreciation. This opposing inventory and cash management logic between upstream and downstream forms the core of the current market stalemate.
Dual Demand Pressures: Abnormal Weather and Weak Domestic Consumption
The fundamental cause of the industry chain divergence is a supply surplus and weak demand. Domestically, summer is typically the peak season for sun-protection fabrics, but abnormal weather—still cool near July—has delayed related demand. Externally, there are some positive signs. With the full reopening of the Strait of Hormuz for shipping, global crude oil and commodity trade order is gradually recovering. Several overseas economies are accelerating their recovery, which may boost international textile consumption. Increased export orders could partially offset domestic weakness, providing some support for the polyester filament market.
Polyester Plants' Production Cut Game: The Real Pressure Behind the Rumors
On June 24, rumors circulated in chemical fiber industry groups that major polyester plants would further increase production cuts. While such rumors are of uncertain credibility, they reflect market focus on supply-side adjustments. Current operating rates are already low, yet inventory pressure remains. Polyester plants face a dilemma: further cuts can control inventory but sacrifice cash flow, while price cuts to destock may lead to losses. In the short term, the weak supply-demand, high price-gap pattern will persist, with the tug-of-war between upstream and downstream continuing to dominate market trends.