Export data shows a rebound, but cost pressures are building simultaneously, leaving the textile industry at a delicate crossroads.
Three Drivers Behind the Export Rebound
In June 2026, China's textile and apparel exports reached $29.27 billion, up 7.2% year-on-year and 14.3% month-on-month—the highest single-month growth in nearly a year. Textile exports alone hit $13.52 billion (+12.2%), while apparel exports stood at $15.75 billion (+3.2%).
This rebound is no coincidence. Following the May China-US summit, a $30 billion tariff reduction deal was reached, unlocking orders previously stalled by trade uncertainty. Simultaneously, Western retailers moved up their autumn/winter procurement cycles due to supply chain concerns, pushing June apparel exports up 21% month-on-month. In the first half of 2026, cumulative textile and apparel exports totaled $145.96 billion (+1.4%), with textile exports growing 3.5%, providing a solid foundation for downstream recovery.
Oil Price Spike Triggers Polyester Chain
Beneath the upbeat export data, cost pressures are mounting rapidly. In early July, an attack on a tanker in the Strait of Hormuz escalated geopolitical risks, with the US revoking Iran's oil export license and launching military strikes. Brent crude briefly surpassed $75/barrel, while WTI crude traded above $72/barrel, with intraday gains exceeding 5%. By July 10, Brent had risen to $76.01/barrel.
This volatility quickly transmitted through the chemical fiber chain. On July 14, PTA prices jumped 2.14% to 6,024.5 yuan/ton, up 25.78% year-on-year. Polyester POY hit 8,168.75 yuan/ton (+17.64%), and DTY reached 9,218.75 yuan/ton (+13.90%). The crude-to-PX-to-PTA-to-polyester filament price chain has been fully activated, strengthening cost support. Downstream mills, fearing further cost increases, began restocking, boosting filament yarn sales and reducing industry inventories.
Three Key Variables for H2 2026
The second half's trajectory hinges on three factors. On the demand side, the second half is the peak season for polyester filament yarn, accounting for over 60% of annual consumption, versus less than 40% in H1. June export data signals early autumn/winter stocking, and if overseas orders continue, downstream weaving mill utilization could rise from the current 52.85%. However, conventional fabric orders remain weak, with grey fabric inventories at 31.68 days. If end-consumer demand disappoints, a structural mismatch of 'upstream price hikes, downstream sluggish sales' could emerge.
On the cost side, no new PTA capacity is planned for 2026, with only one new plant each in 2027 and 2028, signaling a clear capacity contraction. Multiple PTA units are under maintenance in July, pushing inventories to year-lows and supporting filament prices. Yet oil price uncertainty remains the wildcard. Institutions forecast Brent crude averaging $53-63/barrel in 2026, but current prices exceed that range. A de-escalation of geopolitical tensions could trigger a chain-wide price correction, while further conflict would intensify downstream cost pressure.
On industry dynamics, leading polyester filament producers have shifted from passive price-following to active price-hiking in 2026, coordinating capacity cuts to boost pricing power. Current industry inventories are at multi-year lows, and rising grey fabric prices indicate the sector has entered a 'raise prices to protect processing margins' phase. This shift makes filament prices more resilient, but if oil stays high, downstream mills forced to accept higher raw material costs after depleting cheaper inventory could trigger synchronized production cuts across the chain.