Crude oil surged past $86 per barrel, and polyester filament yarn prices have risen for consecutive sessions—the sound of gunfire near the Strait of Hormuz has once again put the textile industry on edge. But repeating the early-2024 logic of 'price hike, then panic buying' could lead to missteps.
The biggest difference between now and early 2024 lies not in how much oil has risen, but in a fundamental reversal of inventory structures upstream and downstream.
Inventory Scissors: Upstream Builds, Downstream Draws
According to China Customs data, as of last week, POY factory inventory stood at 26.4 days, FDY at 32.5 days, and DTY at 37.3 days—7.7, 7.5, and 9.7 days higher than at the start of the year, respectively. The inventory pressure on polyester plants has been accumulating.
In contrast, downstream gray fabric inventory is only 17 days, far below the 24 days seen early in the year. This means weaving mills are not hoarding semi-finished goods; instead, they are operating with lean stock.
The widening inventory scissors directly weaken the transmission of raw material price increases. In early 2024, mills had large order backlogs and were forced to accept high-priced yarn; now, with low operating rates, procurement demand is highly elastic.
Demand Gap: Off-Season Operating Rates Below 60%
Traditional off-season combined with high-temperature power rationing has pushed the average loom operating rate in Jiangsu and Zhejiang to around 57%. Some small and medium-sized factories run only day shifts or even stop periodically. This contrasts sharply with the full-capacity operation during the 'golden March and silver April' period.
In terms of orders, foreign trade new orders are dominated by short-run, small-lot deals, while the domestic market lacks blockbuster fabrics to drive demand. The polyester filament price hike has not sparked restocking appetite; instead, it has intensified a wait-and-see attitude.
Mindset Shift: From Hoarding to Cash Holding
During the price surge early this year, many textile companies chose to hold back gray fabric inventory, expecting prices to rise further. But they soon learned that while raw material prices jumped in one go, fabric price increases required prolonged negotiations with customers, often ending in compromise.
Six months of high-price education has reshaped industry consensus: raw material price changes are fast variables, while fabric price transmission is slow. Today, weaving mills prefer to maintain low inventory and fast turnover, even if it means earning less, rather than taking expensive yarn.
Energy Vulnerability Rises, Black Swan Risk Increases
From a macro perspective, crude oil inventories in many countries are at multi-year lows, with limited room for restocking. If the Strait of Hormuz blockade persists, the marginal impact on energy supply will far exceed that of early 2024.
The dual impact on textiles: on one hand, constrained overseas production may accelerate order shifting to China; on the other hand, soaring energy costs will suppress end-consumer demand and could even trigger inflation and financial risks.
History does not repeat itself exactly, but the risk structure often becomes more complex.