Crude oil has fallen back below $70, yet polyester filament remains nearly 1,000 yuan per ton more expensive than before the regional crisis. This price gap is tearing apart the polyester supply chain—producers cling to high cash flow and refuse to cut prices, while weavers hoard orders waiting for discounts. Both sides are betting on who will blink first.
Where the Gap Came From
On June 24, WTI crude oil briefly dipped below $70, returning to pre-escalation levels. Despite a temporary rebound on June 25 due to geopolitical fluctuations, it hovered around $70 again on June 26. Crude's retreat failed to pull down polyester filament prices. Industry data shows polyester filament is still about 1,000 yuan per ton higher than before the crisis, while PTA and MEG futures have fully erased their gains.
This means the polyester sector is enjoying very healthy cash flow. But behind that cash flow lies the burden of high-cost inventory. Current inventory days stand at 30 for POY, 35.7 for FDY, and 41.8 for DTY—all produced when raw material prices were high. Selling at today's prices would turn paper profits into real losses.
The Logic of the Standoff
Polyester producers have a clear strategy: keep operating rates low to control inventory, and cut prices slowly to protect the books. As of June 24, domestic direct-spun polyester filament capacity utilization was only 73.81%, near a three-year low. Low operating rates mean less pressure to sell, so mills prefer to move product slowly rather than take a one-time hit.
Weavers have equally clear logic. The high cash flow in polyester filament implies plenty of room for further price drops. For order-based production, raw material costs can be passed on; but for stocking standard inventory, buying a month later could save hundreds or even thousands per ton. Hence the market has entered a 'buy only when necessary' mode.
Can Exports Break the Stalemate?
The market isn't without bright spots. With the full reopening of the Strait of Hormuz shipping channel, global crude and commodity trade is normalizing. Faster economic recovery in several overseas economies could boost international textile demand. Export orders may partially offset weak domestic demand and ease downward pressure on polyester filament.
But the export recovery takes time to transmit. In the short term, the pattern of weak supply-demand and high price spreads will persist. Only when one side's inventory or cash pressure reaches a breaking point will prices adjust substantially.