The cost collapse triggered by the sharp drop in oil prices has not brought the expected profit improvement to the polyester industry chain. Instead, a fierce game over volume, price, and profit is unfolding among upstream raw materials, midstream filament yarn, and downstream weaving. The demands of the three parties are mutually exclusive, making the stalemate hard to break in the short term.
Game Pattern: Each Side Has Its Own Agenda
The core contradiction lies in profit distribution. In the upstream PX and PTA sectors, a July maintenance wave has further reduced loads. After August, with the resumption of Strait shipping and refinery restarts, raw material shortages will ease. The upstream's core demand is for filament yarn producers to increase loads, thereby driving PTA demand and accelerating destocking. However, filament yarn companies have chosen to build a "profit fortress" through production cuts. Unlike in the past, when they would cut prices with every raw material drop, they now operate at 70% capacity to secure a processing profit of 500 yuan per ton. Downstream weaving enterprises suffer from the "flour being more expensive than bread" dilemma: filament yarn prices remain high, while terminal orders cannot raise prices, leading to losses on each order. They await a "catch-up drop" in filament yarn prices to a reasonable level before restocking.
Filament Production Cuts: The Key Variable in the Game
The logic of filament yarn companies is clear and tough. In the past, every price cut following raw material drops compressed processing margins, turning them into mere "porters" for upstream. Now, they are determined to protect profit margins. Production cuts not only maintain processing profits but also create supply shortage expectations. However, this comes with side effects: without price cuts, downstream stays away, sales volumes remain low, inventory cannot be reduced, and load increases are impossible. Consequently, upstream PTA sales suffer, and destocking stalls. This creates a deadlock cycle. Public industry data shows that filament yarn companies currently have manageable inventory pressure, but if downstream continues to wait, inventory buildup will force a choice between price cuts and further production reductions.
Downstream Weaving: The Cry for 'Reasonableness' They Can't Afford to Wait
Downstream weaving enterprises face survival pressure. Before the oil price collapse, they endured high raw material costs. Now, with oil prices crashing and polyester raw material costs dropping sharply, filament yarn prices remain stubbornly high. In their view, the excessive processing profit in the filament yarn segment is unreasonable. Downstream waits for a "reasonable" raw material cost before restocking. But waiting has its price: terminal orders won't stop flowing away due to raw material price stalemates. If filament yarn prices don't fall, some weaving companies may be forced to cut production or even shut down, further compressing demand and harming the entire chain. For foreign trade companies, taking orders now means locking in losses, while waiting risks losing customers—a classic dilemma.
Breaking the Stalemate: Where Is the Key?
Currently, no party is willing to make the first move. But the stalemate won't last forever. Looking at the timeline, after August, upstream raw material supply will recover, putting pressure on PTA prices. This could force the upstream side to loosen first. If PTA prices fall, the processing profit margin for filament yarn will expand passively, potentially boosting downstream restocking willingness. Another possibility is that filament yarn companies proactively launch promotions to stimulate demand, though this would require sacrificing some profit. For buyers, maintaining a wait-and-see approach is advisable until filament yarn prices show clear signs of loosening. For foreign trade companies, negotiating floating pricing mechanisms with clients to incorporate raw material cost fluctuations into contracts can help spread risk.