The upstream polyester plants' promotional strategy is creating a short-term market excitement. On July 6, 2026, the average sales-to-production ratio of PET filament sample enterprises surged to 153.8% in the late trading session, prompting moderate replenishment from downstream users. But behind this figure lies a months-long tug-of-war along the supply chain: international oil prices have retreated from highs, yet the pace of polyester plants' price cuts is far slower than market expectations.
The Blocked Transmission of Falling Oil Prices
International oil prices have fallen from their year-highs to pre-Spring Festival levels after US-Iran negotiations, which should have been a positive signal for polyester costs. However, upstream polyester plants have not chosen to significantly lower their quotations. Instead, they release price reductions through limited-time promotions, each time with a modest cut. This strategy of 'discounting without reducing list prices' reflects a firm defense of profit margins: at the current 70% operating rate, unit profit can be maintained at around 500 yuan per ton; if they cut prices to boost volume, profit could shrink to 100 yuan per ton or less. More critically, existing inventory of polyester filaments was produced from high-cost raw materials, making their book costs far higher than current paper costs. Rapid clearance would mean substantial losses.
Polyester plants have formed a consensus against 'involution' after years of relentless price wars. They prefer to reduce operating rates rather than fall back into a cycle of 'selling more but losing more.' In the short term, this strategy stabilizes the price floor but passes pressure downstream.
The Dilemma Facing Weaving Enterprises
For downstream weaving enterprises, the raw material price cuts have not sparked the expected buying frenzy. After the PET filament promotion, the first reaction from downstream was not to place orders but to wait and see, worrying about further price drops. The July 6 promotion saw sales exceeding production, but the previous promotion achieved only 70% of production, highlighting fragile market confidence.
July is traditionally the stocking season for autumn-winter fabrics, but this year, weaving enterprises are extremely cautious in capacity decisions. Unlike last year, when the same period's production halts were mainly due to inventory buildup from full-capacity operations in the first half, this year, weaving firms have been 'scared' by the volatility of raw material prices. The erratic cost movements make enterprises reluctant to increase raw material reserves.
- Optimistic scenario: demand recovery in the second half, fabric prices rise under low inventory, making current stock a 'hot commodity.'
- Pessimistic scenario: fabric prices remain at current levels or fall further; the more produced now, the heavier the losses in the second half.
This uncertainty is directly reflected in operating rates: current downstream operating rates are already low, limiting actual demand for raw materials.
Industrial Belt Reactions and Order Rhythms
Feedback from major textile industrial belts such as Keqiao and Shengze indicates that the market is currently in one of the weakest periods of the year. Order volumes are generally low, order cycles are shortening, and the proportion of urgent and small orders is rising. The traditional model of 'stocking in the off-season and selling in the peak season' is breaking down, with enterprises favoring order-based procurement rather than building raw material inventories in advance.
This shift in rhythm challenges polyester plants' inventory management. On one hand, the marginal effectiveness of promotional tools is diminishing; on the other, sustained production cuts risk missing potential peak-season demand in the second half.
Practical Recommendations
For Purchasers - Use current promotional windows for moderate replenishment, but keep inventory cycles within 15-20 days to avoid depreciation from further price drops. - Monitor international oil prices and US-Iran negotiation progress. If oil prices stabilize or rebound, consider increasing procurement; if they continue to weaken, maintain a wait-and-see approach. - Negotiate short-term floating price agreements with suppliers to partially transfer raw material price fluctuation risks upstream.
For Foreign Trade Enterprises - Include raw material price fluctuation clauses in export order quotations, clarifying adjustment mechanisms to prevent domestic raw material volatility from eroding profits. - Lock in raw material costs for some autumn-winter fabric orders using the current polyester promotion window, but only after confirming orders with downstream clients. - Monitor raw material price trends in competing markets such as Southeast Asia. If domestic polyester prices remain higher than overseas, export competitiveness may be affected.
This upstream-downstream standoff is unlikely to end soon. Whether polyester plants' 'cut production to protect prices' strategy can sustain depends on whether demand recovers as expected in the second half. Meanwhile, weaving enterprises' 'wait-and-see' approach must find a balance between market confidence and inventory costs. The chess game in the textile circle is far from over.