On July 24, the spot price of polyester staple fiber in Jiangsu saw a notable jump, rising by 40 yuan per ton to 7,670 yuan per ton. Meanwhile, the actual market negotiation range was between 7,620 and 7,750 yuan per ton, with the low-end price dipping to around 7,500 yuan per ton. This price movement is not an isolated event but a concentrated reflection of upstream cost pressures persistently passing downstream.
Cost Logic Behind the Price Jump
The core driver of this price hike comes from the polyester raw material side. Despite a decline in crude oil prices during early Asian trading, which led to some pullback in polyester raw material and staple fiber futures, the spot market remained firm. This indicates that the pricing power of polyester staple fiber currently lies more in the cost end than the demand side. PTA and MEG, as direct raw materials for polyester staple fiber, directly determine production costs. The recent high volatility of international crude oil prices has made it difficult for cost support to loosen across the polyester supply chain. For staple fiber plants, rising raw material inventory costs necessitate raising ex-factory prices to alleviate profit pressure.
Notably, the existence of a low-end price of 7,500 yuan per ton in the negotiation range suggests the market is not monolithic. Some traders or plants, possibly due to inventory pressure or bearish outlook, may choose to sell at lower prices, reflecting growing divergence between supply and demand sides on price direction.
Industrial Belt Response: Pricing Strategy of Jiangsu Staple Fiber Enterprises
As a major production area for polyester staple fiber in China, price changes in Jiangsu carry bellwether significance. The 40 yuan per ton increase is moderately high in recent fluctuations, indicating strong pricing resolve from plants. According to industry public data, Jiangsu accounts for over 30% of national staple fiber capacity, and its pricing strategy directly influences price trends in surrounding markets like Shandong and Zhejiang.
Staple fiber plants face a dilemma: on one hand, high raw material costs erode profits without price hikes; on the other, downstream yarn enterprises and end-use fabric mills have limited tolerance for high prices, risking order loss. After this hike, the upper negotiation range of 7,750 yuan per ton approaches the cost threshold for some downstream customers. If raw material prices continue to strengthen, staple fiber prices may rise further; conversely, if crude oil or polyester raw materials correct, prices face downside risk.
Upstream-Downstream Transmission: From Staple Fiber to Yarn to Fabric
The impact of rising polyester staple fiber prices is cascading down the supply chain. Downstream yarn enterprises, direct users of staple fiber, face increased procurement costs that directly compress profit margins. Industry survey data indicates that current processing profits for pure polyester yarn are at thin or loss-making levels. A 40 yuan per ton increase in staple fiber translates to roughly 40-50 yuan per ton in additional yarn costs. If yarn enterprises cannot fully pass costs to downstream weaving mills, they may reduce purchases or lower operating rates.
Weaving mills are even more cost-sensitive. Currently in the traditional off-season, terminal garment orders are limited, and fabric enterprises generally adopt just-in-time procurement strategies. Rising staple fiber prices increase production costs for polyester fabrics, but raising prices in the end market is difficult, forcing fabric firms to potentially compress their own profits. This obstructed cost transmission will ultimately force upstream raw material prices back to reasonable levels.
From a broader perspective, this price hike highlights the core contradiction in the textile supply chain: a tug-of-war between high upstream costs and weak downstream demand. In the short term, polyester staple fiber prices will remain high and volatile, but the long-term trend depends on crude oil price direction and recovery of end-consumer demand.