After the US-Iran peace agreement, international oil prices quickly fell back to pre-war levels, causing a cost collapse in the upstream raw materials of the polyester industry chain. However, this drastic cost-side shift has not been smoothly transmitted to the entire chain. Instead, a zero-sum game over volume, price, and profit is intensifying among upstream raw materials, midstream filament, and downstream weaving. Currently, filament producers, through production cuts, have firmly grasped pricing power, becoming the key variable determining the chain's direction.
Misaligned Demands Under Cost Collapse
The upstream raw material sector is anxious about inventory destocking. In July, large-scale maintenance at PX and PTA plants further reduced operating rates, but with the gradual resumption of shipping through the Strait of Hormuz and the end of refinery maintenance, the tight supply situation is expected to ease from August. The core demand of raw material producers is for filament plants to increase operating rates to match the future supply recovery, thereby accelerating PTA destocking and repairing the industry balance sheet.
The downstream weaving sector has long suffered from the situation where bread is more expensive than flour. Before the oil price crash, filament prices were high, but terminal order prices could not rise, resulting in widespread losses for immediate purchases and production. After the cost collapse, downstream players are waiting for filament prices to fall to reasonable levels; otherwise, taking orders means losing money. They are holding off on restocking until raw material costs support profitable order fulfillment.
The logic of midstream filament producers is completely different. In past years, every time raw material prices fell, they followed with price cuts, squeezing processing margins and making them mere raw material handlers. Now, they are determined to defend their hard-won profit floor. The strategy of cutting output for profit has become core: operating at 70% capacity, profit per ton rises from 100 yuan to 500 yuan. Cutting prices would not only deepen downstream wait-and-see sentiment but also undo all previous production cut efforts.
Filament Production Cuts as Core Variable
The tough stance of filament producers has directly led to a stalemate: they refuse to significantly lower prices, downstream players hold back from restocking, sales data remains weak, inventory cannot be reduced, and upstream PTA sales stagnate.
Industry public data shows that current filament processing margins are at historical highs, giving them stronger bargaining power. However, the sustainability of this strategy is questionable: prolonged output cuts could lead to market share loss and may push downstream weavers to seek substitute materials or increase imports.
For the raw material side, the only lever to break the deadlock is a major sales promotion by filament producers. A large promotion could boost sales, reduce filament inventory, and then justify higher operating rates, which would revive raw material destocking. But filament producers are reluctant to give in easily, preferring to wait for downstream players to accept current prices under order pressure.