Brent crude breaking through $90 per barrel, coupled with heightened risks to navigation in the Strait of Hormuz after a missile attack on a US base, has sent shockwaves through the petrochemical chain. Domestic polyester filament manufacturers have responded with price hikes of 50-150 yuan per ton, opening a window of cost-driven increases.
Cost-Driven Rigidity Crude oil accounts for over 70% of polyester filament production costs. Industry calculations show that every $10-per-barrel rise in oil adds 350-450 yuan to the cost per ton of polyester filament. Unlike previous price increases driven by OPEC+ cut expectations, the current surge stems from genuine supply disruption premiums linked to Middle East tensions. The Strait of Hormuz handles nearly one-third of global seaborne oil trade; any disruption would create a million-barrel-level supply gap, directly pushing up key feedstocks like PTA and MEG.
Notably, unlike the destocking that occurred during the first half of the year when oil prices were falling, current grey fabric inventories at weaving mills are at multi-year lows. This low inventory position, combined with rising cost expectations, has boosted downstream restocking enthusiasm, providing a demand-side cushion for upstream price hikes.
Seasonal Demand Support The traditional 'golden September and silver October' peak season is approaching, with autumn and winter orders from apparel brands gradually being placed. After a prolonged period of low raw material inventory during the first half, the current restocking demand is concentrated. The dual impetus of rising costs and peak season expectations has forced downstream buyers to accept higher raw material prices, keeping the transmission chain intact for now.
However, this transmission is not risk-free. If end-brand tolerance for high-priced materials proves limited, order flow could stall, leading to a pause in restocking and subsequent price corrections. FDY varieties, which enjoy relatively stronger downstream demand, may hold up better in the short term, but their medium-term trajectory depends on the actual recovery of end-consumer demand.
Short-Term Strength, Medium-Term Divergence Looking ahead, the market is likely to remain strong in the short term but diverge in the medium term. As long as Middle East tensions do not materially de-escalate, international oil prices will stay elevated or even rise further, leaving room for additional polyester filament price increases. The key risk is a sudden reversal: if geopolitical tensions ease, oil prices could fall sharply, removing the cost support and triggering a correction.
For industry players, the most critical variable is not demand but the unpredictability of geopolitics. Companies are advised to align production and inventory plans with actual orders, avoiding speculative hoarding amid the rally.