In June 2026, China's textile and apparel exports hit a monthly record of $29.27 billion, up 7.2% year-on-year and 14.3% month-on-month. Textile exports reached $13.52 billion, growing 12.2%, outpacing apparel exports of $15.75 billion (up 3.2%). This export rebound coincides with surging international oil prices due to Middle East geopolitical tensions, with Brent crude briefly exceeding $75/barrel, directly raising costs across the polyester supply chain. This mixed scenario creates uncertainty for the upcoming autumn-winter peak season.
Three Drivers Behind the Export Surge
The sharp recovery in June exports was no accident. The May meeting between Chinese and US leaders led to a consensus on reciprocal tariff reductions for $30 billion in goods, releasing orders previously stalled by tariff risks. Overseas autumn-winter stocking began early as Western retailers moved procurement cycles forward to mitigate supply chain uncertainties, driving a 21% month-on-month increase in apparel exports. Total first-half exports reached $145.96 billion, up 1.4%, with textile exports showing stronger resilience at 3.5% growth, providing raw material support for downstream apparel recovery.
Cost Transmission Chain Fully Activated
The export rebound was quickly overshadowed by cost pressures. The attack on a transport vessel in the Strait of Hormuz in early July, combined with the US canceling Iran’s crude export licenses and launching military strikes, sent international oil prices soaring. By July 10, Brent crude had risen to $76.01/barrel, exceeding many institutions’ 2026 average forecast of $53-63/barrel. This volatility quickly transmitted to the polyester chain: on July 14, PTA spot prices rose 2.14% in a single day to 6,024.5 yuan/ton, up 25.78% year-on-year; polyester POY hit 8,168.75 yuan/ton, up 17.64%; and polyester DTY reached 9,218.75 yuan/ton, up 13.90%. The price transmission from crude to PX, PTA, and polyester filament yarn is now fully established, significantly strengthening polyester cost support. Downstream mills entered the market for just-in-time replenishment amid fear of further cost increases, boosting polyester yarn sales and quickly reducing industry inventories.
Peak Season Expectations vs. Structural Risks
The second half is typically the peak season for polyester filament yarn, accounting for over 60% of annual demand compared to less than 40% in the first half. June export data signals autumn-winter stocking, and if overseas orders continue, downstream weaving mill operating rates could rise from the current 52.85%, supporting polyester yarn demand. However, the current downstream market remains weak, with conventional fabric orders insufficient and gray fabric inventories rising to 31.68 days. If final consumer demand falls short, the supply chain may face a structural contradiction where upstream price increases cannot be passed downstream, squeezing midstream weaving mills’ margins.
PTA supply tightness provides additional price support. No new PTA capacity is scheduled for 2026, with only one new unit each in 2027 and 2028, confirming a clear capacity contraction trend. Multiple PTA plants are under maintenance in July, with inventories expected to drop to year-to-date lows. Meanwhile, leading polyester filament yarn producers are shifting from passive price following to active price support, using coordinated production cuts to enhance pricing power. Current industry inventories are at multi-year lows, and gray fabric price increases indicate the sector has entered a phase of 'raising prices to protect processing margins.' However, this shift’s sustainability depends heavily on oil price trends: if geopolitical risks ease, oil price declines will trigger a correction across the supply chain; if conflict escalates, cost pressures will further pass downstream, potentially leading to synchronized production cuts.