The polyester industry chain is undergoing an unprecedented 'rationality game.' As we enter the second half of 2026, crude oil prices are rapidly retreating from geopolitical premiums, while downstream weaving mills, with near-frozen purchasing discipline, are pushing polyester plants into a high-inventory quagmire. The core contradiction is no longer cost fluctuations but the rebalancing of inventory and elasticity.
Cost Side: Crude Oil 'Ceiling' Lowers, Polyester Loses Its Surge Engine
The narrative logic of international oil prices has fundamentally shifted. With the lifting of the Strait of Hormuz blockade, stranded tankers are gradually resuming passage, and the energy premium driven by geopolitical conflicts is quickly unwinding. Morgan Stanley has twice cut its oil price forecast within two weeks, stating that the market's focus has returned to global oversupply, predicting Brent crude will average $75 per barrel in Q3 and Q4.
What does this mean for the polyester chain? The 'crazy bull' market seen in early March—when polyester filament yarn surged by thousands of yuan in a single week—is almost impossible to repeat. The 'ceiling' on the cost side has been clearly lowered, stripping polyester plants of their most powerful tool for passing on inventory pressure through raw material price hikes. Future price fluctuations for polyester yarn will narrow significantly, further weakening factory pricing power.
Demand Side: Weaving Mills Adopt 'Minimalist' Procurement, Promotion Mechanism Fails
On June 29, polyester plants launched another large-scale promotion, but the market reaction was extremely cold: daily production-sales ratio hovered around only 70%, and the next day it plunged to near 30%. Compared with previous rounds of promotions—which, though often 'one-day wonders,' at least easily broke 100%—the current market has fallen into a classic 'promotion fatigue.'
The behavioral logic of weaving mills has completely changed. With profits squeezed to the limit over the past two years, companies have almost zero room for maneuver. Without orders, they resolutely refuse to start machines; operational elasticity is extremely poor. The price elasticity of fabric is also fragile, with a fierce tug-of-war over the breakeven point between inventory and fresh gray fabric. Downstream no longer buys for 'cheapness' but only for 'confirmed demand.'
Inventory Pressure: Polyester Plants Face 'Passive Stockpiling' Dilemma
Polyester plants are currently trapped in a dilemma: 'concessions have no effect, but not reducing prices is even worse.' POY, FDY, and DTY inventory days stand as high as 30, 35.7, and 41.8 days respectively, and are still accumulating. Factories themselves have high raw material costs, leaving limited room for significant price cuts. However, if the status quo continues, high inventory will erode cash flow. It is not ruled out that there will be a more aggressive round of destocking, or that polyester yarn prices will enter a sustained downtrend.
This situation creates a negative feedback loop within the chain: polyester plants cut prices → downstream waits even more → inventories climb → plants are forced to cut again. The only variable that could break this cycle is an unexpected recovery in end-user demand.
Trigger for Rally: Waiting for a 'New Chinese Style'-Level Hit
The entire textile market is waiting for a catalyst, similar to the 'New Chinese Style' fabric hit during last year's Spring Festival. In the short term, summer sun-protection clothing was seen as a potential driver, but heavy rainfall across China this year has delayed the arrival of high temperatures, pushing back demand for such products.
Looking at a longer cycle, the second half of the year is the real window of opportunity. Because upstream and downstream stockpiling has been generally cautious, and capacity utilization in the first half was limited, current market inventories are relatively low compared to the past two years. Once end-user demand recovers—whether from seasonal clothing changes, foreign trade replenishment, or an unexpected hit product—it could trigger a short-term supply-demand mismatch, thereby restoring fabric price elasticity.
Risk Warning: Payment Safety and Extreme Weather
The textile industry had a tough May and June. The 'golden March-April' peak season is long gone, and the 'golden September-October' is still far off. The worse the market, the higher the operational risks. Some companies may resort to desperate measures, so textile professionals must keep a close eye on payment security. Additionally, extreme weather has notably disrupted consumption patterns this year, adding uncertainty to H2 demand forecasts.