U.S.-Iran Conflict Resurfaces: How the Strait of Hormuz Blockade Reshapes the Polyester Chain's Game Logic

The escalation of the U.S.-Iran conflict in the Strait of Hormuz has directly driven international oil prices up to the $80 range, causing violent shocks across the polyester chain. On July 8, the production-sales ratio of polyester filament yarn soared to 361.9%, with the weekly average reaching 132.7%, signaling obvious panic buying among downstream textile mills. But whether this geopolitical-fueled price rebound is a trend reversal or a short-term stress reaction needs to be examined from three dimensions: capacity, demand, and inventory.

Background: The Transmission Chain from Oil to Polyester

On July 8, the U.S. Central Command announced strikes against Iran in response to Iranian attacks on commercial shipping. According to CCTV News, Iranian Navy air defense officer Hamidreza Dehghan was killed in a U.S. attack on Jask, after which the Strait of Hormuz was again closed. This event quickly transmitted to the crude oil market, with U.S. oil prices returning to the $80 range, and a near 3% gain on July 12.

For the textile industry, crude oil is the source of the polyester chain. Polyester filament yarn prices rebounded immediately on July 8 and continued rising on July 9, with some polyester factories raising prices twice in one day. The previous persistent decline was completely reversed, prompting downstream firms to rush purchases fearing further price spikes.

Industry Impact: The Overlay of Supply Contraction and Panic Buying

Beyond oil price stimulus, the polyester side's confidence also comes from supply-side support. Current polyester yarn capacity utilization is only 74.6%, far below last year's level. Frequent maintenance shutdowns upstream in PTA and PX mean supply is already contracting. When an external shock occurs, low inventory and low operating rates together amplify price elasticity.

However, downstream weaving mills face a more awkward position. It is the traditional off-season, with orders already scarce. Running machines to build inventory carries high risk; not running risks missing further raw material gains. The first half of the year's frequent price fluctuations have already exhausted many mills. This wave of sales explosion is more panic buying than real demand recovery.

Historically, U.S.-Iran conflicts involve cycles of fighting and negotiation. The immediate trigger this time was Iran's attempt to charge fees in the Strait of Hormuz, which the U.S. could not accept, leading to clashes. Notably, a large number of oil tankers had already left the strait before the blockade, alleviating the global crude supply shortage to some extent, preventing oil prices from immediately hitting $100. The market generally believes the blockade will not be prolonged, but whether the situation escalates remains the key variable.

Practical Recommendations

For Procurement Teams - Avoid excessive chasing of price increases: Current gains are largely sentiment-driven, with no substantial improvement in end demand. Once geopolitical risks ease, prices may quickly retreat. Recommend purchasing on a need-to basis, maintaining raw material inventory cycles of 15-20 days. - Monitor PTA and PX maintenance schedules: Supply contraction is a core support factor. If maintenance plans extend or new ones arise, the uptrend may continue; otherwise, be alert for corrections. - Use forward contracts to lock costs: For orders requiring guaranteed supply, consider short-term price-lock agreements with suppliers to hedge against sudden price spikes.

For Export Firms - Include price fluctuation clauses in quotes: In export contracts, specify price adjustment mechanisms when raw material costs fluctuate beyond a certain threshold, to prevent margin erosion. - Monitor exchange rate and freight linkage: Rising oil prices often push up shipping costs and affect the RMB exchange rate, requiring a comprehensive assessment of impact on export competitiveness. - Diversify supply chain risk: If Middle East tensions persist, evaluate the feasibility of sourcing alternative raw materials from Southeast Asia or South Asia to reduce dependence on a single source.