The latest round of polyester promotions in late June 2026 saw a tepid market response, with production-sales ratios sliding from 70% to around 30%. This marks the latest example of diminishing returns after repeated discount campaigns. Polyester mills offer concessions, but weaving enterprises show little interest even in bargain restocking, pushing upstream-downstream dynamics into an unprecedented stalemate.
Cost Ceiling Lowers
Crude oil costs underpinning polyester prices are softening. Morgan Stanley has revised its oil price forecast downward for the second time in two weeks, now expecting Q3 and Q4 Brent crude to average $75 per barrel, citing a return to global oversupply. The reopening of the Strait of Hormuz has allowed stranded tankers to depart, easing short-term energy crisis fears and making a repeat of the 50% price surge unlikely. This means polyester filament yarn costs face diminished upward pressure, and polyester mills will struggle to gain pricing power from the raw material side.
From a chain perspective, weaker cost support directly reduces polyester mills' room for price concessions. Current POY, FDY, and DTY inventories stand at 30, 35.7, and 41.8 days respectively, still accumulating. Mills' high-cost raw material inventories limit their ability to cut prices, but downstream reluctance means mounting inventory pressure.
Downstream 'Extreme Rationality' and Inventory Game
Weaving enterprises are undergoing a shift toward 'extreme rationality.' Without firm orders, they refuse to restart looms. After two years of squeezed margins, their operational flexibility is severely constrained. Fabric price elasticity is poor, and breakeven points between inventory greige goods and new orders remain in fierce negotiation. In this state, downstream buying is minimal, limited to small restocking at low prices, with no appetite for large-scale stockpiling.
Market 'promotion fatigue' is no accident. Earlier rounds, though short-lived, could at least push production-sales ratios above 100%. Now even that brief excitement is gone. Polyester mills offer discounts, and weavers barely glance—a stalemate reflecting structural imbalances in industrial profit distribution.
Conditions for H2 Market Recovery
The entire textile market awaits a catalyst. Last year's 'New Chinese-style' fabrics drove a rally. This summer, sun-protection apparel was expected to lead, but persistent heavy rainfall and delayed high temperatures have postponed demand. A similar blockbuster product is needed to activate demand.
From an inventory perspective, H1 capacity utilization was limited, and both upstream and downstream have been cautious in stocking. Current market inventories are relatively low compared to the past two years. Once demand recovers, this low-inventory setup could trigger a supply-demand mismatch, restoring fabric price elasticity. This is the most notable potential opportunity for H2.
However, May and June were not easy for textile players. The 'golden March-April' season is long gone, and 'golden September-October' remains distant. The worse the market, the higher the risks, with payment security remaining a constant sword of Damocles.