The sharp drop in international oil prices, triggered by the easing of Middle East geopolitical tensions, has shaken the cost foundation of the polyester chain. However, this seemingly positive "cost collapse" has not led to a win-win situation. Instead, a fierce game over volume, price, and profit is unfolding among upstream raw materials, midstream filament yarn, and downstream weaving, with conflicting demands creating a rare stalemate.
The Tripartite Game: Divergent Interests
Upstream, the PTA sector is undergoing large-scale maintenance, with operating rates declining in July. Public data indicates a significant increase in PTA maintenance in July, tightening short-term supply. However, upstream anxiety centers on the future—after August, as shipping in the Strait of Hormuz resumes and refinery maintenance ends, raw material shortages will gradually ease. The key question is whether the polyester end can raise operating rates to match the return of raw material supply. The upstream's clear desire is for filament producers to increase operating rates, thereby driving PTA demand, accelerating destocking, and repairing the forward balance sheet. The most effective lever to achieve this is for filament producers to cut prices and boost sales.
The downstream weaving sector is a typical victim of "losing money on every order made." Before the oil price crash, end-users suffered from "flour being more expensive than bread"—high filament prices combined with inability to raise fabric prices, leading to widespread losses. Now, with cost collapse, downstream sees hope for relief, but filament prices have remained stubbornly high. In their view, the current high processing margins of the filament sector are unreasonable, and they refuse to accept this "upstream feasts, downstream gets scalding soup" status quo. Therefore, downstream is waiting for filament prices to "catch down" to a reasonable level before restocking.
Midstream filament producers, however, operate on a different logic. In past years, every time raw material prices fell, they would cut prices to boost sales, only to see processing margins squeezed, turning them into mere "porters" for upstream. Now, they are determined to protect their hard-won profit floor. A simple calculation: previously, running at full capacity yielded a profit of 100 yuan per ton; now, running at 70% capacity yields 500 yuan per ton. Once they cut prices, not only would downstream wait for further declines, but all previous output reduction efforts would be wasted. This tough stance has created a vicious cycle: filament producers refuse to cut prices, downstream refuses to buy, sales remain sluggish, inventory builds, and operating rates cannot rise, which in turn prevents upstream from destocking.
Structural Conflict of Interests
The stalemate is not accidental but a structural conflict of interests. The desires of upstream and downstream both come at the expense of the filament sector—upstream wants higher filament output, downstream wants lower filament prices. Conversely, the filament sector's desire to maintain high profits comes at the expense of both upstream and downstream. The core contradiction lies in the filament sector's use of output cuts as a "sharp sword" to control the entire chain. Output cuts directly suppress PTA demand, preventing upstream destocking, while the resulting price rigidity discourages downstream from placing orders. Although filament producers seem to hold the initiative, this strategy carries risks: if the stalemate persists, they may face mounting inventory pressure and loss of downstream orders.
Path to Breakthrough: Who Will Blink First?
Currently, no party is willing to concede. Filament producers fear that any price cut will trigger further downstream wait-and-see behavior, leading to a "lower prices, lower sales" spiral. Downstream firms believe that continued patience will force filament producers to eventually cut prices due to inventory pressure. Upstream can only hope for a major filament promotion to activate the entire chain.
Industry data shows that polyester operating rates have declined in July, but filament profit margins remain high. This suggests filament producers have the buffer to continue output cuts in the short term. Downstream raw material inventories are generally low; once filament prices show a clear decline, restocking demand could be released intensively, breaking the deadlock. However, if filament producers persist in price support, downstream may switch to alternative materials or further reduce capacity, eventually forcing filament to concede.