The second closure of the Strait of Hormuz has sent crude oil prices soaring, immediately heating up the polyester supply chain. Yet this time, the reaction from weaving mills is markedly calmer than the post-Lunar New Year surge, when polyester filament prices jumped 500 to 1,000 yuan per day. Now, daily increases of 50 to 100 yuan reflect a market that is repricing supply-demand dynamics with more caution.
Raw Material Transmission: From Surge to Gradual Climb
The earlier price spike was driven by pent-up demand and panic restocking after COVID. This round is different: crude inventories were already depleted by the first blockade. Between June 18 and July 5, only 28 ships per day passed through the strait—far below the pre-conflict average of 130-138. Although Asian countries replenished some stocks, the International Maritime Organization reported on July 8 that hundreds of vessels and about 6,000 seafarers remain stranded in the Persian Gulf, signaling persistent supply tightness.
Polyester mills have adopted divergent pricing strategies. Some opt for small daily increases to test downstream tolerance; others hold steady, waiting for clearer crude direction. This cautious approach reveals concerns about weak demand—weavers carry high inventories, and final orders remain tepid, making aggressive price hikes a recipe for order loss.
Export Data and Industrial Zone Responses
Customs data released on July 14 offered a bright spot: June textile and apparel exports rose 7.2% year-on-year and 14.3% month-on-month, with textile exports up 12.2% and apparel up 3.2%. First-half cumulative exports reached $145.96 billion, up 1.4%. The numbers reflect order backflow from Southeast Asia, where energy shortages have disrupted production.
In clusters like Shengze and Keqiao, loom utilization remains high, and some mills report extended lead times. The reason is clear: Southeast Asian countries, heavily dependent on Middle Eastern crude, face power and chemical shortages, while China’s early investment in coal chemicals and renewables ensures more stable energy costs and supply continuity. Global brands are shifting procurement back to China.
However, apparel export growth (3.2%) lags far behind textiles (12.2%), suggesting that backflow orders concentrate on intermediate goods like fabrics and yarns, not finished garments. This positioning means Chinese mills enjoy short-term gains but must remain wary of downstream price sensitivity.
Long-Term Risks: Inflation and Liquidity Contraction
Crude oil’s role as the foundation of modern industry means its price surge has far-reaching effects beyond polyester. U.S. data show that since May, the military has escorted over 800 commercial vessels, transporting about 400 million barrels of crude. Yet this hasn’t fully allayed inflation fears. If oil stays high, U.S. CPI could reaccelerate, forcing the Fed to resume rate hikes. Tighter global liquidity would directly hit consumer demand, especially for price-sensitive fast fashion and mass-market apparel.
For China’s textile industry, high export dependence means external shocks transmit quickly. The H1 export growth was largely driven by restocking, not genuine consumption recovery. Once Western economies slow due to rate hikes, order sustainability becomes questionable. Iran claims it has exported 40 million barrels at a 20% premium, signaling that even if the strait reopens, crude prices may settle at a higher floor, keeping cost pressure persistent.