International oil prices have plummeted following the US-Iran peace agreement, but the polyester industry chain is mired in an unusual triangular stalemate. Upstream raw material suppliers, midstream filament yarn producers, and downstream weaving mills hold conflicting demands, and any unilateral concession risks self-sacrifice. This is not a simple price transmission failure but a structural game of interest redistribution.
Upstream: Passive Waiting Under Inventory Pressure
Upstream PX and PTA sectors underwent large-scale maintenance in July, reducing operating rates. However, looking ahead, with the resumption of shipping through the Strait of Hormuz and the end of refinery maintenance, raw material supply shortages are expected to ease after August. The core anxiety for upstream players is whether the polyester sector can simultaneously raise operating rates to match future supply recovery.
PTA producers' direct demand is for higher filament yarn operating rates, which can drive PTA demand, accelerate short-term destocking, and restore the forward supply-demand balance. The most effective lever to trigger higher filament yarn operating rates is large-scale promotions from filament yarn producers to release volume. Once sales volume picks up, filament yarn inventory pressure eases, providing confidence to raise operating rates, thereby revitalizing upstream destocking. But the reality is that upstream players are waiting for filament yarn concessions, while the latter appears in no hurry to act.
Midstream: Building a Profit Fortress with Production Cuts
Filament yarn producers' logic is rooted in painful lessons from past years: each time raw material prices fell, they cut prices to promote sales, only to see processing margins squeezed to nothing, becoming mere "porters" for upstream. Now, they are determined to defend the profit floor they have painstakingly built.
From a financial perspective, filament yarn producers have opted for a "reduce volume, protect margin" strategy: previously, full production yielded 100 yuan profit per ton; now, running at 70% capacity yields 500 yuan per ton, resulting in higher overall profits. Once they lower prices, they risk triggering deeper downstream waiting—"if prices can drop today, can they drop again tomorrow?"—and undoing all previous production cut efforts. This tough stance has created the current deadlock: filament yarn producers refuse to cut prices significantly; downstream mills refuse to enter the market; sales volume remains low; inventory cannot decrease; operating rates cannot rise; and upstream PTA cannot sell, thwarting upstream destocking plans.
Downstream: Waiting for a Reasonable Raw Material Price
Downstream weaving mills are the most painful link in the current chain. Before the oil price crash, end-users suffered from the "flour being more expensive than bread" scenario—high upstream filament yarn prices while downstream texturing and weaving orders could not raise prices, leading to widespread losses on immediate production.
Now that oil prices have collapsed and polyester raw material costs have fallen sharply, downstream players finally see a glimmer of hope. But they are angered by filament yarn prices' unusual resilience. In their view, the current ultra-high processing margins at the filament yarn stage are unreasonable—upstream eats meat while downstream can't even get soup. Their logic is simple: without reasonable raw material costs, accepting orders means losing money. So they wait for filament yarn prices to "catch down" to a reasonable level before entering the market to restock. This waiting exacerbates the sluggish sales, creating a vicious cycle.
Industry Impact: Who Suffers Most from the Stalemate?
In the current triangular deadlock, all parties are bearing varying degrees of loss. Upstream raw material inventories continue to accumulate, and supply recovery after August may further worsen the balance. Midstream filament yarn producers have preserved processing profits, but lower operating rates mean higher fixed-cost amortization; if the stalemate lasts months, cash flow pressure will gradually emerge. Downstream weaving mills face order loss risks—end customers won't wait indefinitely, and if overseas orders shift to lower-cost regions like Southeast Asia, domestic markets will permanently lose some share.
From an overall chain efficiency perspective, this "three-way mutual lock" represents a resource misallocation. While filament yarn producers' production cuts protect short-term profits, if downstream weaving shrinks due to high costs, the entire polyester chain's demand base will erode over the long term.