International crude oil prices briefly surged past $100 before rapidly retreating, with PTA dropping over 5% in a single day and some polyester filament yarn prices declining by 50-100 CNY/ton. This volatility stems from a dramatic de-escalation in US-Iran military tensions—the US military postponed expanding strikes due to depleted air defense missile inventories. However, the textile industry's core question remains: can this temporary relief at the raw material end truly transmit to downstream weaving and dyeing sectors?
Public data suggests the answer is not optimistic. Although oil prices have fallen from $100 to around $90, the overall trend for polyester raw materials remains prone to upward movements rather than sustained declines. The operating rate for polyester filament yarn stands at 74.39%, while downstream draw-texturing machine utilization in Jiangsu and Zhejiang is only 61.93%, with weaving operating rates around 50%. Production and sales are largely balanced, meaning polyester factories face little destocking pressure and thus lack motivation for continuous price cuts.
Fracture and Restructuring of Cost Transmission
Pricing power in the polyester supply chain is highly concentrated upstream. Several large polyester producers effectively lock in profit margins through capacity control and inventory management. Even when crude oil prices fall temporarily, polyester yarn prices tend to be adjusted through short-term promotions rather than forming a downward trend. For downstream weaving mills, this structural bargaining disadvantage means raw material costs remain persistently high.
The pressure on dyeing costs is even more direct. Disperse black dye prices surged twice within a month, accumulating a total increase of 5,000 CNY/ton. Shaoxing dyeing mills have issued price hike notices, raising processing fees for light-medium colors by 100-300 CNY/ton and dark colors by 300-500 CNY/ton starting August 1st. The dye industry is similarly dominated by a few large players, leaving dyeing companies with virtually no bargaining power and forcing them to passively accept price increases.
Production Cuts and Shutdowns: Buying Time as a Strategy
When raw material costs persistently invert, the rational choice for weaving mills is to reduce production. An increasing number of factories are opting for shutdowns or lowering operating rates to control inventory and cash flow risks. This "buying time" strategy essentially waits for signals of upstream cost reductions or downstream demand recovery.
However, when such signals will emerge remains highly uncertain. The trust foundation for US-Iran negotiations has been severely eroded, making the possibility of a new agreement in the short term extremely low. Meanwhile, restricted shipping capacity through the Strait of Hormuz means crude oil supply risks persist long-term. Additionally, the unpredictability of Trump's policies makes oil price trends difficult to forecast—he may take a tough stance one day and retreat the next.
Industry Impact: From Price Games to Survival Battles
For textile companies, the core challenge has shifted from profit margins to survival space. Cost inversions are common for basic fabrics, and the marginal impact of raw material fluctuations is diminishing. Companies are more concerned about whether their cash flow can sustain them until the market recovers.
This fracture in cost transmission exposes the long-standing power imbalance across the supply chain. Upstream giants maintain profits through capacity concentration, while downstream small and medium enterprises lack hedging tools during price volatility. Going forward, this structural contradiction may accelerate industry consolidation—companies with weak capital and low bargaining power will be eliminated, while those with supply chain integration capabilities or differentiated product advantages will gain market share.