Crude oil prices have fallen back to levels seen before the escalation of the Middle East crisis, but polyester filament yarn prices still carry a premium of nearly 1,000 yuan per ton. This price gap is tearing apart the logic of the polyester industry chain. On June 24, U.S. WTI crude oil briefly dipped below $70/barrel. Although it rebounded on June 25 due to renewed tensions in the Middle East, it fell back to around $70 on June 26. According to public industry data, current oil prices have essentially erased all gains from the recent geopolitical event. However, polyester filament yarn prices remain nearly 1,000 yuan per ton higher than before the surge, while PTA and ethylene glycol futures have largely returned to their starting points.
The Pricing Deadlock Amid High Cash Flow
The high price of polyester filament corresponds to its currently substantial cash flow. Polyester plants indeed have attractive book profits, but the reality is far more complex. As of June 24, the capacity utilization rate of domestic direct-spun polyester filament units was 73.81%, a three-year low. Low operating rates should help control inventory, but the situation is different: POY plant inventory stands at 30 days, FDY at 35.7 days, and DTY at 41.8 days. These stocks were produced during a period of high costs. If prices were cut sharply now, plants would turn paper losses into real losses. Therefore, the strategy is to "reduce prices slowly and sell slowly," buying time. For weaving mills, the high cash flow in polyester filament signals a high probability of future price declines. Unless they have urgent orders to fulfill, buyers generally adopt a "non-essential no-buy" stance, waiting for further price drops. This wait-and-see attitude directly suppresses market transactions.
Supply-Demand Imbalance as the Root Cause
Weak supply-demand dynamics and insufficient domestic demand are the core roots of the divergence in the industry chain. Traditionally, July is the peak season for sun-protective clothing, but abnormal cool weather this year has delayed the related market. The weak demand side cannot absorb existing production capacity and inventory, intensifying the tug-of-war between upstream and downstream. However, the market is not without turning points. With the full reopening of the Strait of Hormuz shipping channel, global crude oil and commodity trade order is gradually recovering. The recovery pace of multiple overseas economies is accelerating. This is expected to boost international textile consumption demand, providing some support for China's textile export market. Incremental export orders in the coming period may partially offset the pressure from weak domestic demand, easing the downward pressure on the polyester filament market.
Short-Term Outlook and Long-Term Inflection Point
In the short term, the pattern of weak supply-demand and high price spreads in the polyester industry chain is likely to persist. The game between polyester plants and weaving mills will continue to dominate market trends. For buyers, the current price window is not an ideal entry point, but the recovery of export orders could become a variable that breaks the deadlock. If overseas demand is released in the third quarter, buyers may be forced to accept current high prices, triggering a new round of restocking.