The collapse of oil prices did not bring a spring to the polyester chain, but instead exposed a brutal triangular game of volume, profit, and price.
After the US-Iran peace agreement, international oil prices fell rapidly to pre-war levels, and the Strait of Hormuz gradually reopened. Theoretically, cost collapse should relieve the entire polyester chain. However, in reality, upstream raw material suppliers, midstream filament producers, and downstream weavers each hold different calculators, and no one is willing to make the first move.
Upstream Anxiety: Inventory Pressure, Waiting for Filament to Move
PTA and PX sectors feel the pressure first. After extensive maintenance in July, plant operating rates have dropped to low levels. But the more pressing issue is after August—as shipping resumes and refinery maintenance ends, raw material supply will gradually return. If polyester end doesn't increase operating rates, PTA surplus inventory will be hard to digest.
The core demand of upstream is clear: filament producers must raise operating rates. Only when filament operating rates rise can PTA demand recover, accelerating destocking and repairing the forward balance sheet. The most effective way to push filament to raise rates is through promotional sales. Upstream is eagerly waiting for filament producers to launch a big promotion: once sales volumes pick up, filament inventory pressure eases, and there is confidence to raise rates, upstream destocking can accelerate.
But the problem is that filament producers are not cooperating.
Midstream Logic: Cut Output to Protect Margins, Not Be a 'Transporter'
Filament producers are taking a very tough stance. In the past, every time raw material prices fell, they would cut prices to promote sales, only to see processing margins squeezed, turning them into mere 'transporters' for upstream. Now, they are determined to hold the profit floor they have built.
Data shows: previously, running at full capacity earned 100 yuan per ton; now, running at 70% capacity earns 500 yuan per ton. This is a good economic calculation. Once prices are lowered, it will not only trigger deeper wait-and-see from downstream—'If it can drop today, will it drop tomorrow?'—but also undermine all previous output reduction efforts.
This stance creates a deadlock: filament producers won't cut prices much, downstream won't enter the market, sales volumes won't pick up; without sales, filament inventory won't drop, making it impossible to raise operating rates; without filament raising rates, upstream PTA sales stagnate, and the destocking wish fails.
The entire chain is trapped in a vicious cycle.
Downstream Anger: Loss on Every Order, Waiting for a Fair Raw Material Price
The most painful link is downstream weaving. Before the oil price collapse, end-users suffered from 'flour being more expensive than bread'—high filament prices paired with low order prices, leading to losses on every production run.
Now that oil prices have crashed, downstream sees hope for relief. But they are angry that filament prices remain stubbornly high. In their view, the current high processing margins at the filament stage—'upstream eats meat, downstream only gets hot soup'—are unreasonable.
Downstream is waiting for filament prices to 'catch down' to a reasonable level before entering the market to stock up. Without reasonable raw material costs, accepting orders is just losing money.
Given the filament producers' tough stance, downstream's wait may last a while.
When Will the Deadlock Break?
Currently, no party is willing to make concessions. Upstream faces maintenance and supply return pressures; midstream has output cuts to protect margins; downstream has losses and patience for wait-and-see.
From an industry perspective, this deadlock won't last forever. Once inventory pressure hits a tipping point, or an unexpected event occurs (e.g., sudden major plant maintenance, policy intervention, order spike), the balance will break. But until then, all parties must endure.
For buyers, the most rational strategy now is not to blindly bottom-fish, but to closely monitor filament inventory and operating rate data. When filament producers start promotional sales and the sales-to-production ratio exceeds 100%, that is the time to enter the market for restocking. For foreign trade companies, beware of the impact of short-term raw material price volatility on export order pricing—before the deadlock breaks, long-term contracts should adopt floating pricing mechanisms.