The collapse in oil prices has not brought warmth to the polyester industry chain. Instead, a fierce game over volume, price, and profit is unfolding among upstream raw materials, midstream filament, and downstream weaving. Industry data shows that international oil prices fell sharply after the US-Iran peace agreement, with the Strait of Hormuz gradually reopening, but polyester filament prices have been unusually resilient, exacerbating the 'operating at a loss' situation for downstream weaving.
The Natural Conflict of Three-Way Demands
The core contradiction lies in diametrically opposed demands. Upstream PX and PTA producers want filament to increase operating rates and purchase volumes to absorb their own inventories. Downstream weaving demands filament prices to 'catch down' to reasonable levels, or they refuse to restock. Midstream filament producers lock in processing profits through production cuts, unwilling to reduce prices.
Data shows that in July, PX and PTA plant maintenance intensified, further reducing loads. However, from August onward, as shipping in the Strait recovers and refinery maintenance ends, raw material shortages may gradually ease. This means the upstream window is narrowing—if filament doesn't raise operating rates, PTA destocking will be disrupted.
Filament: Production Cuts as a Profit Moat
Filament producers' logic is clear: in past years, every time raw materials fell, they cut prices, compressing processing margins and becoming mere 'porters' for upstream. Now, they use production cuts to build a profit floor. Industry data shows current filament processing margins are at historical highs. Even at 70% capacity, a ton earns 500 yuan, compared to 100 yuan at full capacity.
This hardline stance has created a stalemate: filament won't cut prices, downstream won't buy, sales stagnate; without sales, inventory doesn't drop; without inventory reduction, operating rates can't rise; without higher rates, upstream PTA can't sell. The three parties are trapped in a classic prisoner's dilemma.
Downstream Weaving: Waiting for Reasonable Raw Material Costs
For downstream weaving, the biggest pain is 'flour being more expensive than bread.' Before the oil crash, orders couldn't raise prices, and buying raw materials at spot prices meant losses. Now, with raw material costs collapsing but filament prices resilient, this 'upstream eats meat, downstream gets hot soup' situation is unacceptable.
They wait on the sidelines until filament prices 'catch down' to reasonable levels before restocking. Without reasonable raw material costs, taking orders means losing money. But the filament producers' production cut strategy is prolonging this wait.
Upstream: Hoping Filament 'Moves'
PX and PTA producers are equally anxious. July's large-scale maintenance has lowered loads, but supply is set to return. The key is whether polyester can raise operating rates to match. Their core wish is for filament to increase capacity, boosting PTA demand and accelerating destocking.
The most effective lever is a filament promotion. Upstream eagerly awaits a big sale—once sales surge, inventory pressure eases, giving filament room to raise rates, and upstream destocking revives. But filament producers are reluctant to concede.
When Will the Stalemate Break?
Currently, no party is willing to compromise. Historically, such standoffs break in two ways: downstream is forced to accept high prices due to order pressure, or filament is forced to cut prices due to inventory pressure.
Given that terminal demand hasn't recovered and filament inventories are still accumulating, the likelihood of price cuts is rising. Whether filament producers choose to 'cut off an arm' depends on their trade-off between profit and market share.