In June 2026, China's textile and apparel exports surged 7.2% year-on-year to $29.27 billion, with a month-on-month increase of 14.3%. Textile exports reached $13.52 billion, up 12.2%, while apparel exports rose 3.2% to $15.75 billion. However, behind this rebound, international oil prices spiked sharply in early July due to geopolitical tensions, with Brent crude briefly breaking $75 per barrel. Polyester filament prices followed suit, with PTA rising 2.14% in a single day. The simultaneous arrival of export recovery and cost increases has made the outlook for the textile industry in the second half of the year highly uncertain.
The Logic Behind the Export Rebound
The sharp jump in June export data was no accident. According to customs data, China's textile and apparel exports in the first half of 2026 totaled $145.96 billion, a modest 1.4% increase year-on-year. The surge in June was driven by three factors.
First, after the China-US summit in May, the two sides reached a consensus on tariff reductions for $30 billion worth of goods, releasing orders that had been shelved due to tariff uncertainties. Second, Western retailers moved their autumn/winter procurement forward due to supply chain uncertainties, with apparel exports in June rising 21% month-on-month, reflecting overseas markets' early bets on autumn/winter consumption. Third, the upstream part of the supply chain showed stronger resilience—textile exports grew 3.5% in the first half, providing raw material support for the downstream apparel export recovery.
For buyers, the "pulse" growth in June exports means that overseas orders are not a full recovery but a combination of pent-up orders and seasonal stockpiling. Once these orders are digested, the sustainability of subsequent demand remains to be seen.
Cost Side: The Transmission Chain from Oil to Polyester Filament
The attack on a transport ship in the Strait of Hormuz in early July triggered the surge in oil prices. After the US canceled Iran's crude export license and launched military strikes, Brent crude rose to $76.01 per barrel on July 10, with WTI crude above $72 per barrel. The rise in crude prices quickly transmitted to the polyester supply chain.
On July 14, PTA prices rose 2.14% in a single day to 6,024.5 yuan per ton, a 25.78% year-on-year increase. Polyester POY was quoted at 8,168.75 yuan per ton, up 17.64% year-on-year, while polyester DTY was quoted at 9,218.75 yuan per ton, up 13.90%. The price transmission chain from crude to PX to PTA to polyester filament has been fully established. Polyester filament companies raised prices accordingly, and downstream weaving factories replenished stocks out of fear of further price increases, boosting filament sales and rapidly reducing industry inventories.
Notably, there will be no new PTA capacity in 2026, and only one new plant each in 2027 and 2028, indicating a clear capacity contraction trend. Several PTA units are scheduled for maintenance in July, and inventories are expected to fall to year-to-date lows, providing fundamental support for filament prices. However, oil price trends remain the biggest uncertainty—institutions forecast an average Brent crude price of $53-63 per barrel for 2026, and current prices have exceeded the upper limit. If geopolitical risks ease, oil price declines could drive a correction in the supply chain.
Industry Game: From Passive Following to Active Price Support
In 2026, the pricing strategy of leading polyester filament companies has undergone a fundamental shift. In the past, the industry passively followed oil price fluctuations, but this year, leading companies have improved their bargaining power by coordinating production cuts to control capacity. Current industry inventories are at multi-year lows, and grey fabric prices have begun to rise, indicating that the industry has entered a phase of "raising prices to protect processing fees."
This shift means that polyester filament prices have become more resilient to declines. Even if oil prices correct in the short term, due to tight PTA supply and strong willingness of leading companies to support prices, the decline in filament prices may be limited. However, for downstream weaving enterprises, the situation is more complex. The current downstream market is generally weak, with insufficient orders for conventional fabrics and grey fabric inventories rising to 31.68 days. If end-user consumption falls short of expectations, the supply chain could face a structural contradiction of "upstream price increases, downstream sluggish sales."
From the perspective of operating rates, current weaving enterprises are at about 52.85%. In the second half, during the traditional autumn/winter peak season, this figure is usually expected to rise. But if cost increases squeeze processing profits, the room for operating rate improvements may be limited.
Market Outlook: Q3 Peak Season Support, Q4 Risk Accumulation
The second half of the year is the traditional peak consumption season for polyester filament, with demand accounting for over 60% of the annual total, compared to less than 40% in the first half. The June export data has already signaled an early start to autumn/winter stockpiling. If overseas orders continue to flow in, downstream weaving operating rates are expected to recover, providing demand support for polyester filament.
However, multiple risks need to be monitored in Q4: first, the US Section 301 investigation may impose additional tariffs, bringing policy uncertainty that will affect apparel export orders; second, high oil prices may erode export companies' profits; third, if end-user consumption falls short, the supply chain will face destocking pressure.
Overall, the textile market in the second half of 2026 is likely to show a pattern of "strong in the first half, stable in the second." In Q3, supported by autumn/winter stockpiling and export orders, polyester filament prices are expected to remain high. In Q4, the market will need to observe end-user consumption and oil price trends, and all links in the supply chain should prepare for risk management.