Export data and cost pressures are climbing in tandem, placing the textile supply chain at a critical crossroads. China's textile and apparel exports reached $29.27 billion in June 2026, up 7.2% year-on-year and 14.3% month-on-month, according to customs data. Textiles contributed $13.52 billion (up 12.2%) and apparel $15.75 billion (up 3.2%).
Structural Drivers Behind the Export Rebound
The rebound is not accidental. A tariff-reduction agreement of $30 billion between China and the US in May released pent-up orders. European and US retailers, worried about supply chain stability, moved autumn/winter procurement forward, pushing apparel exports up 21% month-on-month. First-half cumulative exports reached $145.96 billion, up 1.4%, with textile exports growing 3.5%, indicating underlying support from upstream raw materials.
Cost Side: Oil Surge Reshapes Polyester Pricing
While exports recover, cost pressures mount rapidly. After a tanker attack in the Strait of Hormuz and US military strikes on Iran, Brent crude briefly exceeded $75/barrel, with WTI above $72/barrel. By July 10, Brent stood at $76.01/barrel, above most forecasts of $53-63/barrel for 2026.
The oil shock quickly transmitted to the polyester chain. On July 14, PTA prices rose 2.14% to 6,024.5 yuan/ton, up 25.78% year-on-year; polyester POY hit 8,168.75 yuan/ton, up 17.64%; and DTY reached 9,218.75 yuan/ton, up 13.90%. The oil-to-PX-to-PTA-to-polyester filament price pass-through is fully activated. No new PTA capacity is scheduled for 2026, and only one unit each in 2027 and 2028, tightening supply. Combined with extended maintenance shutdowns in July, PTA inventories are expected to hit year-lows, lending further support to filament prices.
Supply Chain Dynamics: From Passive Following to Active Price Support
In 2026, leading polyester filament makers shifted from passive price takers to active price supporters, coordinating production cuts to boost bargaining power. Inventories are at multi-year lows, and grey fabric prices have started to rise, signaling a phase of "raising prices to protect processing margins."
This shift makes filament prices more resilient, but downstream capacity to absorb costs is being tested. Weaver operating rates stand at 52.85%, with grey fabric inventories at 31.68 days and conventional fabric orders weak. If oil stays high, downstream mills, after exhausting low-cost raw material stocks, may be forced to accept higher-priced inputs, potentially triggering synchronized production cuts across the chain.
The second half is the traditional peak season for polyester filament, with demand accounting for over 60% of annual consumption. June export data already signaled early autumn/winter restocking. If overseas orders continue, weaver operating rates could recover, supporting filament demand. However, actual end-consumer spending remains the biggest variable.