Crude oil has broken through $86, and polyester filament yarn has risen for consecutive trading days. The tension in the Strait of Hormuz has once again reminded the textile industry of the early-2024 rally that saw prices surge by 3,000 yuan in three days. But this time, the fundamentals on both the supply and demand sides are fundamentally different.
Inventory Structure: High Polyester, Low Grey Fabric
At the beginning of the year, POY inventory stood at just 18.7 days, FDY at 25 days, and DTY at 27.6 days. Now, these figures have climbed to 26.4, 32.5, and 37.3 days respectively—an average increase of nearly 10 days. This means polyester factories face much greater destocking pressure than earlier this year.
In stark contrast, grey fabric inventory has dropped from an average of 24 days at the start of the year to just 17 days today. While weavers have less stock to sell, low inventory does not equate to strong purchasing intent—the missing link is downstream orders.
Demand Cycle: Golden Season vs. Off-Season
Early 2024 fell within the "golden March–April" peak season, when textile mills had large volumes of outstanding orders to fulfill, making raw material procurement a necessity. Now, the industry is in its traditional off-season, with weaving machine operating rates generally low and apparel brands slowing down their order placements.
Even though crude oil surges have driven up polyester yarn prices, weaving mills have little incentive to chase the rally. Industry data shows that while polyester sales volumes have picked up in the past week, most purchases have been speculative by traders rather than genuine demand from weavers.
Mindset Shift: From Hoarding to Cash-Holding
During the early-2024 price surge, many textile companies chose to hoard inventory, expecting grey fabric prices to follow suit. But after half a year of market education, the industry has learned a hard lesson: raw material price hikes are swift and decisive, but price transmission to grey fabrics and finished fabrics is painfully slow. Negotiations with downstream clients often end in compromise, and raising prices on old inventory is nearly impossible.
This experience has shifted the industry's stance from stockpiling to cash-holding caution. As raw material costs continue to rise, market polarization will intensify: companies with orders are forced to replenish at high prices, while those without orders simply exit the market.
Geopolitical Risk: The Fragility of Energy Supply Chains
The trigger for this round of crude oil increases is the blockade of the Strait of Hormuz and U.S. airstrikes. Compared to early 2024, a critical macro variable is that major global economies' crude oil inventories were already low, with insufficient replenishment, drastically reducing their ability to withstand shocks.
If the blockade persists, the ripple effects will be more severe. On one hand, production disruptions in some countries may accelerate order transfers to China; on the other hand, overseas demand may be further suppressed, potentially triggering global inflation and financial risks. The probability of black swan events is rising exponentially.