Geopolitical tensions in the Middle East have once again ignited raw material costs, with the Strait of Hormuz crisis now transmitting shocks through the polyester supply chain. Brent crude surged nearly 10% in a single day, and polyester filament yarn has risen for consecutive working days. Textile professionals are reminded of the early-year rally that saw prices jump 3,000 yuan in days. But this time, inventories, demand, and sentiment have all shifted, and the divergence within the industry may be more pronounced than in the first half.
Inventories and Demand: Two Key Variables Reversed
According to industry data, current POY inventory stands at 26.4 days, FDY at 32.5 days, and DTY at 37.3 days, roughly 8, 7, and 10 days higher than at the start of the year. Meanwhile, gray fabric inventories have fallen from 24 days to 17 days. This divergence weakens the bargaining power of weaving mills.
More critical is the demand gap. Early this year coincided with the peak "golden March and silver April" season, with mills holding substantial orders. Now, the industry is in a traditional slack season, with loom utilization rates declining significantly. This means even if crude oil drives up polyester yarn prices, mills are far less willing to restock than they were in the first half.
Market Sentiment: A Collective Shift from Hoarding to Waiting
During the early-year rally, many companies hoarded inventory, hoping to profit from further price increases. But after months of difficult price transmission—raw material hikes were swift, while finished fabric price increases required prolonged negotiations—industry perceptions have been reshaped.
Now, the entire industry prefers to hold cash and wait rather than actively stockpile. This sentiment shift means that without real order support, the current price rally may face a "price without volume" scenario. If the price gap between raw materials and finished goods continues to widen, it will accelerate cash flow pressure on small and medium weaving mills.
Geopolitical Variables: Rising Probability of Black Swan Events
At the macro level, global crude oil inventories are already low, and many countries have insufficient buffers against supply disruptions. If the Strait of Hormuz blockade continues, energy supply interruptions could trigger chain reactions.
For Chinese textile exporters, this presents both opportunities and risks. On one hand, production disruptions in some countries may accelerate order transfers to China. On the other hand, overseas demand may be suppressed by inflation and financial risks. The outcome of these competing forces will directly shape the trajectory of textile exports in the second half of the year.