From July 8 to 12, international oil prices fluctuated sharply due to escalating tensions in the Hormuz Strait, with WTI crude briefly returning to the $80 range. The polyester chain quickly transmitted the shock: polyester filament prices rebounded after a period of continuous decline, with some polyester plants even raising prices twice in a single day. This round of movement reflects the intertwining of geopolitical risks and industrial supply-demand imbalances.
Background: Geopolitical Risk Reignites, Oil Volatility Hits Chemical Fibers
On July 8, the U.S. Central Command announced a series of strikes against Iran in response to attacks on commercial shipping. On July 12, an Iranian naval officer was killed in a U.S. strike on Jask, leading to the re-closure of the Hormuz Strait. A memorandum of understanding between the two sides had been signed earlier but quickly collapsed.
International oil prices rose sharply, with a nearly 3% gain on July 12 alone. This directly impacted the polyester chain—crude oil is the core raw material for PX and PTA. Cost-side pressure quickly transmitted to polyester filament prices. On July 8, the average production-sales ratio of polyester filament surged to 361.9%, and the weekly average reached 132.7%, far exceeding normal levels.
Notably, a large number of oil tankers had already left the strait before the blockade, alleviating some global supply tightness. As a result, oil prices did not spike to $100 as they did earlier this year. However, the market generally believes that short-term geopolitical risks will continue to dominate crude trends, and cost support for the polyester chain is unlikely to fade quickly.
Industry Impact: Supply Contraction and Panic Buying Coexist, Demand Weakness Limits Gains
The polyester side has fundamental support for this rebound. Current capacity utilization for polyester filament stands at only 74.6%, well below last year's level. Upstream PTA and PX units are undergoing frequent maintenance, tightening supply. China Customs data shows that PX imports fell approximately 12% year-on-year in the first half of 2026, as domestic refining capacity adjustments exacerbated raw material constraints.
Downstream weaving enterprises face a dilemma. The current season is traditionally slow, with orders generally thin. Companies must choose between ramping up production and risking inventory buildup, or staying idle and facing higher future raw material costs. Frequent raw material price swings in the first half have already exhausted weaving firms, and this round of panic buying is more about risk aversion than genuine demand recovery.
From the production-sales data, the 361.9% ratio suggests large volumes of polyester filament are being hoarded by downstream players, but end-use garment and home textile orders have not increased synchronously. This inventory transfer may shift pressure forward—if geopolitical risks ease and oil prices fall, those who stockpiled at high prices could face significant depreciation losses.
Practical Recommendations
For Buyers - Increase raw material inventory moderately in the short term, but avoid excessive hoarding; prioritize locking in spot prices over futures contracts. - Monitor Hormuz Strait developments and OPEC+ production policies; if crude oil prices fall, polyester filament may follow quickly. - Negotiate flexible pricing clauses with polyester plants to reduce unilateral volatility risk.
For Export Enterprises - Include raw material price fluctuation clauses in export order quotes to prevent cost increases from eroding margins. - Watch the RMB exchange rate and oil price linkage; geopolitical events may amplify currency volatility and affect settlement returns. - Communicate delivery timelines with overseas clients in advance; if raw materials continue rising, consider batch delivery or price adjustment mechanisms.
Overall, this polyester filament rally is triggered by geopolitical events, but the long-term logic lies in supply-demand fundamentals. Industry participants should guard against post-panic-buying pullback risks while using short-term volatility to optimize inventory management.