Entering the second half of 2026, international oil price expectations are shifting from 'geopolitical premium' back to 'supply-demand fundamentals'. Morgan Stanley revised its forecast downward for the second time in two weeks, capping Brent crude at $75/barrel for Q3 and Q4. This means the cost ceiling for the polyester chain is clearly defined, and the panic buying and cost pass-through logic triggered by the crude surge in H1 are collapsing.
Cost Side: Crude Premium Fades, Polyester Loses 'Bull Run' Momentum
With the Strait of Hormuz reopened and stranded tankers sailing out, the short-term energy crisis has eased. Oil prices have shifted from the extreme scenario of a 50% weekly spike after the Spring Festival to a moderate range. For polyester filament yarn, cost support from PTA and MEG has weakened significantly, making it impossible to repeat the 'thousands of yuan per ton surge' seen in early March. Polyester plants can no longer use raw material spikes as an excuse to raise prices; the game must return to real supply and demand.
Demand Side: Weaving Mills' 'No Orders, No Production' Becomes Norm
On June 29, polyester plants launched routine promotions, but sales that day reached only about 70%, dropping to 30% the next day. Compared to previous rounds where promotions easily doubled sales, the market has clearly entered a 'promotion fatigue' phase. Downstream weaving mills, squeezed by two years of low profits, have tight cash flow and minimal room to maneuver. Price elasticity in fabrics has nearly disappeared, and the breakeven point between inventory stock and fresh orders remains in deadlock.
- Weaving mills' procurement strategy: only small replenishments at low prices, refusing large-scale stocking
- Operating rates: extremely low elasticity due to order shortages, with more mills halting production
- End demand: summer sun-protection fabrics delayed due to frequent heavy rains and late heatwaves
Inventory and Margins: The 'Prisoner's Dilemma' for Polyester Plants
Polyester plants face a double squeeze from high raw material costs and high inventory. Current POY, FDY, and DTY inventories stand at 30, 35.7, and 41.8 days respectively, and are still accumulating. The willingness to offer discounts is constrained by high feedstock costs, but if downstream continues to hold back, polyester filament prices may enter a downward channel or force a more aggressive clearance sale. This 'discount-wait-discount' cycle is eroding market confidence.
H2 Opportunity: Supply-Demand Mismatch from Low Inventory
Despite the current downturn, the entire chain has kept stocking cautious, and capacity utilization in H1 was limited, resulting in overall inventory levels lower than the past two years. This means that once demand picks up unexpectedly (e.g., a hot fabric trend, seasonal restocking), the low inventory environment could easily trigger a short-term supply-demand mismatch, restoring price elasticity in fabrics. The 'New Chinese Style' fabric explosion last Spring Festival is a precedent.
- Potential catalyst: delayed sun-protection clothing demand could cluster release once heat arrives
- Structural opportunity: low inventory plus low operating rates equals a potential window for price elasticity recovery