Just as crude oil prices breached the $100/barrel mark, market sentiment swiftly reversed. On June 26, international crude futures plunged over 6% intraday, dragging PTA futures down more than 5%, prompting some polyester plants to cut filament yarn prices by 50-100 yuan/ton. Behind this price volatility lies a temporary de-escalation in the US-Iran military standoff.
Background
According to public reports, President Donald Trump postponed expanding military strikes against Iran, primarily because the Pentagon flagged dwindling inventories of air-defense interceptors like the Patriot system. Two sources told media that Trump, during a meeting with senior advisors and officials on June 24, focused on the shortage of ammunition. This suggests Iran's retaliatory actions have materially strained US logistics, reducing the likelihood of near-term escalation.
The news quickly rippled through energy markets. Oil fell from $100/barrel toward $90/barrel as fears of a Strait of Hormuz supply disruption temporarily eased. However, the drop in oil has not yet translated into broad cost relief for textile raw materials.
Industry Impact
The sharp decline in PTA futures directly dampened polyester raw material spot expectations, but polyester plants have reacted cautiously. Industry data shows polyester filament operating rates at 74.39%, not high. Downstream, draw-texturing machine utilization in Jiangsu and Zhejiang stands at 61.93%, while weaving rates hover around 50%. This means polyester sales can roughly match production, leaving mills with little inventory pressure and thus limited incentive for aggressive price cuts.
Meanwhile, another cost component—dyes—continues to rise. Disperse black dye has been hiked twice in one month, cumulatively up 5,000 yuan/ton. Dyeing mills in Shaoxing have issued notices for August 1, raising fees by 100-300 yuan/ton for light-medium shades and 300-500 yuan/ton for dark shades. Whether for polyester filament or dyes, the pricing logic is similar: upstream giants leverage industry concentration to control prices and margins, while downstream weaving and dyeing mills have little bargaining power and must passively accept costs.
Looking longer-term, a sustained oil price downtrend is unlikely. First, even if US ammunition is strained, maintaining a strait blockade requires fewer missiles, and as long as tanker passage through Hormuz is hindered, oil will not correct significantly. Second, months of US-Iran negotiations produced a fragile memorandum of understanding; now that trust is shattered, renegotiation will take longer and incur greater political costs, during which strait transit capacity will remain constrained. Third, the Trump administration's unpredictable decision-making—sometimes hawkish, sometimes retreating—adds huge uncertainty to future oil prices.