China's textile and apparel exports hit $29.27 billion in June 2026, up 7.2% year-on-year and 14.3% month-on-month, according to industry data. Textile exports alone reached $13.52 billion, growing 12.2%, outpacing apparel's 3.2% growth. This surge was driven by three factors: the release of pent-up orders after US-China tariff easing, early autumn-winter stocking by overseas retailers, and the resilience of upstream textile raw material exports.
However, the cost side has tightened sharply. Geopolitical tensions in the Strait of Hormuz pushed Brent crude above $75 per barrel in early July, settling at $76.01 by July 10. The price transmission chain from crude to PX, PTA, and polyester filament has fully activated. On July 14, PTA prices jumped 2.14% to 6,024.5 yuan per ton, up 25.78% year-on-year. Polyester POY rose to 8,168.75 yuan (up 17.64%), and DTY reached 9,218.75 yuan (up 13.90%). Polyester producers now have solid cost support, prompting downstream mills to replenish on a just-in-time basis, reducing inventory levels.
Demand-Cost Balancing Act
The second half is the peak season for polyester filament, accounting for over 60% of annual demand, versus less than 40% in H1. June's export data signals early autumn-winter order placement. If overseas orders continue, weaving mill operating rates could rise from the current 52.85%, supporting polyester demand. But the downstream market remains weak: conventional fabric orders are insufficient, and grey fabric inventories have climbed to 31.68 days. This creates a risk of 'upstream price hikes, downstream sluggishness' if final consumption disappoints.
On the supply side, no new PTA capacity is scheduled for 2026, with only one new plant each in 2027 and 2028. Multiple PTA units are under long-term maintenance in July, pushing inventories to yearly lows. This structural tightness provides a floor for polyester prices.
Industry Pricing Power Shift
In 2026, leading polyester filament producers have shifted from passive price-taking to active price-making, using coordinated capacity cuts to boost bargaining power. Industry inventories are at multi-year lows, and grey fabric mills have started raising prices to protect processing margins. This change makes polyester prices more resilient to downside. However, if oil prices retreat due to geopolitical de-escalation, current high-cost inventories face depreciation risks. Analysts forecast Brent crude averaging $53-63 per barrel in 2026, well below current levels, leaving room for correction.