Crude oil has surged past $86, and polyester filament yarn has posted consecutive daily gains. The closure of the Strait of Hormuz once again places the textile industry at the epicenter of a raw-material storm. But this time, the reaction curve across industrial clusters is fundamentally different from earlier this year.
Background
Military confrontation between the U.S. and Iran in the Strait of Hormuz escalated rapidly. After Iran announced a temporary closure of the strait, Brent crude surged nearly 10% in a single day, the largest daily gain in six months. The U.S. responded by reinstating a naval blockade and briefly proposed a 20% fee on cargo passing through the strait—a measure withdrawn within 24 hours, but not before the situation had slipped beyond unilateral control. Iran declared the previous memorandum of understanding with the U.S. null and void, activating a state of national war.
Polyester filament yarn began rising from the 8th, with consecutive daily increases that reversed a prolonged downtrend. On the surface, this round resembles the earlier rally—both driven by geopolitics and raw-material shocks—but underlying industrial fundamentals tell a different story.
Industry Impact
Inventory data reveal the first key divergence. As of last week, POY factory inventory stood at 26.4 days, FDY at 32.5 days, and DTY at 37.3 days—about 8–10 days higher than at the start of the year. Greige fabric inventories, however, moved in the opposite direction: currently around 17 days versus 24 days in January. This means upstream polyester plants carry heavier stock pressure, while downstream weaving mills hold thinner raw-material buffers.
The order book gap is even more pronounced. Early this year, the industry was entering the peak season of "Golden March and Silver April," with mills holding substantial backlogs that necessitated raw-material procurement. Now, the traditional off-season has depressed loom utilization rates, sharply reducing the willingness to restock. This demand weakness makes it far more difficult for raw-material price increases to pass through the supply chain.
A deeper shift has occurred in market psychology. After nearly six months of high raw-material prices, the industry has been disabused of the "hold and wait for appreciation" logic. Earlier this year, a popular saying went: "Yarn is made of gold, and the fabric in the warehouse is also made of gold." Many mills hoarded inventory expecting further gains. But over time, they discovered that while raw-material prices rose sharply in one step, the pass-through to greige fabric and finished goods required protracted negotiations, with old inventory barely able to command a premium. This lesson has made the industry overwhelmingly cautious—preferring to hold cash rather than chase price increases.
At the macro level, energy-demand fragility adds another variable. Many countries have drawn down their crude oil reserves and only partially replenished them, leaving limited buffers. A prolonged strait closure could trigger cascading effects: on one hand, production disruptions abroad may accelerate order migration to China; on the other, overseas demand could be suppressed, potentially igniting global financial risks through inflation.