The polyester market in the second half of 2026 is experiencing an unprecedented 'promotion fatigue.' On June 29, polyester factories launched another large-scale price promotion, but the market response was tepid, with the daily sales rate hovering around 70%; the next day, it quickly fell to around 30%. Compared to the past when 'one-day' promotions could easily exceed 100% sales, even brief moments of excitement have become a luxury. Downstream weaving mills seem to have lost even the interest to 'take a look,' only making small replenishments at low prices with no intention of large-scale stocking.
Cost Side: Crude Oil 'Ceiling' Lowers, Polyester Cost Pressures Ease
Support from the raw material side is weakening significantly. Although the situation in the Middle East is not completely settled, the key Strait of Hormuz has been reopened, and oil tankers stranded in the Persian Gulf are gradually departing, providing a short-term relief to the energy crisis. International oil prices are unlikely to surge by 50% within days, as seen after the Spring Festival. Morgan Stanley has again lowered its oil price forecast within two weeks, believing the market focus has returned to global oversupply, with Brent crude averaging $75/barrel in Q3 and Q4. The lower crude oil 'ceiling' means reduced cost pressure for polyester filament, making it difficult for prices to replicate the 'bull run' of early March.
Demand Side: Weaving Mills Turn 'Ultra-Rational,' Operating Flexibility Minimal
The collapse in demand is the core reason for the current market slump. Downstream weaving mills have become ultra-rational decision-makers: they will not start machines without orders. Profits have been squeezed too thin over the past two years, leaving little room for maneuver, resulting in extremely poor operating flexibility. The price elasticity of gray fabric is also poor, with the breakeven point between inventory and fresh goods still being contested. This conservative 'order-driven' strategy has directly rendered polyester factories' promotions ineffective—even price cuts fail to stimulate downstream purchasing.
Inventory Dilemma: Polyester Factories Caught Between High Stocks and Low Margins
Polyester factories are reluctant to offer further discounts because their raw material costs are high, but the reality is stark: POY, FDY, and DTY inventories stand at 30 days, 35.7 days, and 41.8 days, respectively, and are still accumulating. If downstream demand remains weak, polyester yarn may face two paths: continued gradual price declines, or a more aggressive one-time clearance sale. This reflects a difficult balance between protecting margins and managing inventory pressure.
Catalyst for Recovery: Can Low Inventories Create Supply-Demand Mismatches?
Despite the current gloom, there are glimmers of hope. The entire textile market is waiting for a catalyst, possibly a blockbuster product like last year's 'New Chinese Style' fabric. In the short term, summer sun-protection clothing is the most likely candidate, but heavy rainfall across China this year has delayed high temperatures and thus the demand for such garments.
More notably, both upstream and downstream players in the textile industry have been cautious in stocking, and capacity utilization in the first half has been limited. As a result, market inventories are relatively low compared to the past two years. Once demand recovers, it could trigger a short-term supply-demand mismatch, restoring price elasticity for fabrics. This makes the second half a potential turning point.
Risk Alert: Payment Security and Market Chaos
May and June have been tough for textile professionals. The 'golden March-April' peak season is long gone, and the 'golden September-October' period still seems distant. In a downtrend, market risks increase, and some may engage in unscrupulous practices. Textile players must remain vigilant and prioritize payment security to avoid falling into 'order traps.'