Crude oil surged nearly 10% on the 13th, pushing Brent above $86, and polyester filament yarn followed with consecutive daily price increases. On the surface, this mirrors the 'three-day, three-thousand-yuan' rally seen early this year. But a look at inventory, orders, and market sentiment reveals a fundamentally different logic.
Inventory Structure: High Feedstock, Low Fabric Stock
Industry data shows POY factory inventory at 26.4 days, FDY at 32.5 days, and DTY at 37.3 days. In contrast, post-Chinese New Year figures were 18.7, 25, and 27.6 days respectively—nearly 10 days less. Meanwhile, greige fabric inventory stands at just 17 days, down from 24 days at the start of the year. Weavers have avoided building raw material stocks, operating on a hand-to-mouth basis. This divergence means polyester mills struggle to pass on cost increases downstream.
Demand Cycle: Off-Season Weakness
The early-2024 rally rode on the 'golden March–April' peak season, with mills holding substantial orders. Now, the industry is in a traditional low season with loom utilization at yearly lows. Yarn purchases are purely for immediate needs, not stockpiling. This weakens polyester mills' pricing power—even with crude cost pressure, the magnitude and duration of the price hike will likely be limited.
Sentiment Shift: From Hoarding to Waiting
During the earlier rally, many mills hoarded inventory, believing 'yarn is gold, fabric is gold.' But six months taught a hard lesson: raw material prices can jump in one step, but fabric prices require painful negotiations with buyers. Old stocks barely budge. This experience has reshaped behavior: the industry now prefers to hold cash and wait. Consecutive polyester price increases may trigger more buyers to pause and wait for a pullback.
Energy Variable: Rising Black Swan Risk
The Strait of Hormuz situation is volatile. Iran has declared its memorandum with the U.S. void and put the country on a war footing. Although Trump quickly reversed his 20% transit fee announcement, military actions are no longer under unilateral control. Global crude inventories are only partially replenished after the last drawdown, leaving limited buffer. A prolonged blockade could send orders to China (short-term positive) or suppress overseas demand and trigger financial risks (negative). The balance of these two forces will dictate textile trade in H2.