On July 3, 2026, domestic polyester POY (150D/48F semi-dull) prices narrowed to a range of 8,050-8,200 yuan per ton, with only a 150 yuan gap between quotes from two Zhejiang plants. This narrow fluctuation has persisted for weeks, pushing the market into a typical 'directionless' phase—hoping that the traditional peak season will revive demand, yet fearing that new capacity will flood in and crash prices.
The Supply-Demand Imbalance Behind Prices
Public quotes show Rongsheng Petrochemical in Hangzhou at 8,200 yuan/ton and Juxing Chemical Fiber in Shaoxing at 8,050 yuan/ton. Both are at low levels for the year, without the usual 'off-season but not weak' pattern seen in previous years. Industry data indicate that in the first half of 2026, new POY capacity added about 1.2 million tons, while downstream texturing and weaving sectors have not expanded their absorption capacity at the same pace.
More telling is the inventory cycle. According to industry statistics, current POY factory inventory days have risen from 12 days at the start of the year to 18 days, with some small and medium producers exceeding 20 days. This means that if demand fails to pick up quickly, destocking pressure will cascade from POY to DTY and grey fabrics.
Dual Squeeze from Costs and Demand
Upstream PTA prices have been weakening since May, loosening the cost support logic. Spot PTA has fallen about 5% from its April peak, but POY prices have only tracked down slightly, compressing processing margins. This signal is critical for buyers: if PTA continues to decline, the room for POY price cuts will open up.
On the downstream side, operating rates at major weaving clusters in Shaoxing and Xiaoshan dropped to around 65% in late June, 5 percentage points lower than the same period last year. Terminal garment export orders, especially for woven fabrics to Europe and the US, have seen a notable year-on-year decline. The entire chain is locked in a stalemate of 'upstream holding prices, downstream waiting and seeing.'
Long-Term Concerns from the Capacity Cycle
2023-2026 marks a concentrated expansion period for the polyester chain. In the POY segment alone, cumulative new capacity over the past three years has exceeded 4 million tons. Industry concentration has further shifted toward leaders like Rongsheng, Hengli, and Tongkun, but the space for small and medium enterprises has been severely squeezed.
From a regional perspective, Zhejiang remains the most concentrated province for POY capacity, with quotes from Hangzhou and Shaoxing effectively anchoring national prices. The problem is that when capacity growth far outstrips demand growth, even regional giants cannot escape unscathed. The industry's average operating rate fell from 85% in 2025 to 78%, and further to about 73% in the first half of 2026.
Structural Changes in Export Markets
Although direct POY exports are not large, as an intermediate product, its price fluctuations indirectly affect foreign trade firms through textured yarn and grey fabric exports. According to customs data, from January to May 2026, China's cumulative exports of polyester filament yarn (including POY, FDY, and DTY) grew about 8% year-on-year, but the average export price fell 3.5% year-on-year.
This means foreign trade firms face a 'volume up, price down' dilemma. Especially in South and Southeast Asian markets, the price gap between domestic POY and local Indian and Vietnamese products is narrowing, weakening China's price advantage. For export processors using POY as raw material, more precise management of raw material procurement timing is essential.