Crude oil has fallen back below $70 per barrel, yet polyester filament yarn remains nearly 1,000 yuan per ton more expensive than before the Middle East conflict. This is not a simple failure of cost pass-through, but a comprehensive misalignment across inventory, capacity, and expectations in the supply chain.
The Price Gap: A Battle of Cost and Inventory
On June 24, U.S. WTI crude oil futures briefly broke below $70/barrel, erasing almost all gains since the onset of the recent Middle East tensions. Although a rebound occurred on the 25th due to geopolitical fluctuations, by the 26th, oil prices were again hovering near $70. In contrast, polyester filament yarn prices remain nearly 1,000 yuan/ton higher than pre-conflict levels.
This discrepancy stems directly from the cost structure of polyester plants. While PTA and MEG futures have essentially returned to their pre-crisis levels, the existing inventory of polyester filament was produced when oil prices were high. Industry data shows that current inventory levels stand at 30 days for POY, 35.7 days for FDY, and 41.8 days for DTY. Immediate price cuts would turn unrealized losses into real ones. Therefore, polyester plants are opting for slow, gradual price reductions.
Low Capacity Utilization, But Even Weaker Demand
According to Longzhong data, the operating rate of domestic direct-spun polyester filament yarn capacity was 73.81% on June 24, up 0.29% from the previous week. However, over a longer timeframe, this level is near a three-year low. While low operating rates should help control inventory, the contraction in demand has been even more severe.
Weaving enterprises are currently adopting a "non-essential, no buy" strategy. Given the substantial cash margin on polyester filament, they believe there is significant room for prices to fall further. Unless they have orders to fulfill, purchasing raw materials just to build inventory risks a cost difference of several hundred yuan per ton within a month. This wait-and-see attitude has resulted in sluggish market transactions, with polyester plants' price cuts of 50-150 yuan/ton falling far short of buyer expectations.
Weak Domestic Demand, Exports as a Variable
The root cause of the supply-demand imbalance is the weakness in the domestic consumer market. Summer is typically the peak season for sunscreen apparel, but abnormal weather this year—with temperatures remaining cool until late June—has delayed the start of the related fabric season. This has directly weakened the purchasing power of weaving mills.
However, not all market signals are negative. With the full reopening of shipping lanes in the Strait of Hormuz, global crude oil and commodity trade order is gradually being restored, and economic recovery in several overseas economies is accelerating. According to China Customs data, recovering external demand is expected to boost international textile consumption. Increased export orders could partially offset domestic pressure and alleviate downside risks in the polyester filament market.
Short-Term Stalemate to Persist
In the short term, the polyester industrial chain is expected to maintain a pattern of "weak supply-demand and high price gaps." Polyester plants, constrained by high-cost inventories, have limited willingness to cut prices. Weaving enterprises, facing uncertain demand prospects, remain cautious. The tug-of-war between upstream and downstream players will continue to dominate market trends.