The polyester industry is undergoing a shift from emotion-driven to reality-driven dynamics. In late June 2026, polyester plants launched another round of promotions, but market response was tepid: daily sales-to-production ratios hovered around 70%, then plummeted to near 30% the next day. Compared to past promotions that easily exceeded 100%, downstream purchasing has entered a deep wait-and-see mode. This reflects a dual squeeze from weakening cost support and persistent demand weakness.
Cost 'ceiling' lowers, polyester exits bull run
The tide is turning in international crude oil markets. With the reopening of the Strait of Hormuz, stranded tankers are departing, significantly easing Middle East supply tensions. Morgan Stanley has again lowered its oil price forecast within two weeks, expecting Brent crude to average $75 per barrel in Q3 and Q4. This means the cost-driven logic that propelled polyester filament prices to surge by thousands of yuan per ton in early March has dissipated. The lowered oil price ceiling directly weakens cost support for the polyester raw material chain, sharply reducing upstream price hike expectations.
Downstream 'extreme rationality': no orders, no production
The demand contraction is more severe than anticipated. Weaving mills have simplified their operational logic to 'no orders, no production.' With profits squeezed over the past two years, companies have limited room for maneuver, and operating rates are at low elasticity. Fabric price elasticity is also weak, with breakeven points for inventory and new orders still under negotiation. This extreme rationality has rendered polyester plant promotions ineffective—even price cuts fail to trigger large-scale restocking.
Inventory pressure vs. limited price-cutting room
Polyester plants face a dilemma. On one hand, inventories of POY, FDY, and DTY stand at 30, 35.7, and 41.8 days respectively, and are still accumulating. On the other hand, high raw material procurement costs limit their ability to offer deep discounts for rapid destocking. This 'high inventory, low discount' deadlock traps the market in a vicious cycle of promotion fatigue. If downstream continues to hold back, polyester filament may face sustained price declines or force a more aggressive clearance sale.
Key to H2 recovery: hit products and supply-demand mismatches
The turning point may come from 'hit products.' Last year's 'New Chinese Style' fabric successfully ignited demand; this year, potential drivers include summer sun-protection clothing. However, frequent heavy rainfall in China has delayed high temperatures, pushing sun-protection demand later. More notable is the structural opportunity: due to cautious stocking across the chain in H1, current inventories are at relatively low levels. If demand picks up in H2, it could trigger short-term supply-demand mismatches, restoring fabric price elasticity. This low-inventory-driven elasticity will be the biggest variable for the polyester market in H2.