Crude oil prices surged from the $73 range to above $75 per barrel within just over ten hours, with Brent crude posting a single-day gain of 5%. For the textile industry, this is not merely an energy market fluctuation but a signal that the cost chain for chemical fiber raw materials is about to be repriced.
Cost Side: The Pricing Anchor for PTA and Polyester Is Shifting
International oil prices have a strong positive correlation with the polyester supply chain. For example, naphtha and PX account for over 70% of PTA production costs, and naphtha prices largely track crude oil. When WTI breaks $75/barrel and Brent approaches the $80 threshold, the theoretical cost support for PTA will shift significantly upward. Industry data shows that in the past five years, every time crude rose more than 8% in a month, PTA prices followed with a 3%-5% gain within two weeks.
Polyester filament and staple fiber face similar direct cost pressure. Their main raw materials are PTA and MEG, both derived from the crude oil processing chain. If crude remains elevated or rises further, polyester producers' profit margins will compress rapidly, prompting factory gate price hikes. For chemical fiber clusters in Shengze and Changxing, this means a new round of cost bargaining is about to begin.
Supply Side: The 'On-Off' Effect of the Strait of Hormuz
The immediate trigger for this oil price jump was renewed escalation in the Middle East: Iran announced the closure of the Strait of Hormuz, followed by U.S. military action. The strait handles about one-third of global seaborne oil trade, and its accessibility directly determines the supply outlook for international crude. Even a partial disruption would not only tighten spot supply but also trigger panic premiums in futures markets.
For the textile industry, the impact goes beyond oil price numbers. Geopolitical risks in the Middle East typically lead to higher shipping insurance premiums, longer transit times, and tighter letter-of-credit terms. These hidden costs will eventually be passed on to the landed prices of imported raw materials. For coastal polyester plants relying on imported PX or MEG, logistics disruptions can be more damaging than price volatility itself.
Industrial Belt Reaction: The Window from Waiting to Action
Major textile fabric hubs such as Keqiao and Shengze are currently in a transitional period between traditional low and peak seasons. July is usually the stockpiling phase for weaving mills, where downstream buyers lock in raw materials for autumn/winter orders. After the sudden crude spike, polyester plants will likely adopt a 'no quote' or 'limited order' strategy to assess cost changes.
Upstream raw material suppliers may simultaneously tighten discount offers. In late June, polyester filament saw a promotional price cut, with transaction prices near cash costs. As crude costs rise, that discount room will quickly disappear. Weaving mills now face a dilemma: either chase the rally and lock in current prices, or wait and risk higher costs later, with the added danger of inventory devaluation if oil retreats.
Medium-to-Long-Term Outlook: Cost Transmission Will Not Be Instant
It is important to note that the cost pass-through from crude to finished textile fabric is not instantaneous; it typically takes 2-4 weeks. The transmission chain runs: crude → naphtha → PX → PTA → polyester chip → polyester filament/staple → grey fabric → finished fabric. Each link has inventory buffers and price negotiation, so the final adjustment in fabric prices is usually smaller than the crude oil move.
However, if Middle East tensions persist and crude stays elevated in a high range, the floor for chemical fiber raw materials will systematically rise. In that scenario, textile companies' cost management capabilities will directly determine their profit performance in the second half of the year. Exporters must also watch RMB exchange rate fluctuations and ocean freight changes—geopolitical crises often affect both currency expectations and shipping costs simultaneously, creating a multi-layered pressure overlay.