The polyester supply chain has just experienced a sharp but brief price shock. PTA fell over 5% in a single day, and some polyester plants cut filament yarn prices by 50 to 100 yuan/ton. While this appears to be a chain reaction triggered by a pullback in crude oil prices, the underlying logic is deeply rooted in both geopolitical games and the industry's internal capacity control mechanisms.
Geopolitical Easing and the Broken Transmission from Oil
International crude oil retreated from above $100 to around $90 per barrel, directly driven by easing market fears of an escalating US-Iran military conflict. The US military, facing a shortage of air defense interceptor missiles, has delayed expanding strikes on Iran, signaling that short-term conflict is unlikely to intensify. Panic quickly withdrew from the futures market.
For the textile industry, however, the transmission from crude oil to polyester raw materials is not linear. Polyester filament yarn prices depend more on the supply-demand balance and pricing strategies of polyester plants. As long as crude oil does not enter a sustained freefall, large polyester producers have ample room to absorb raw material fluctuations through periodic promotions rather than initiating a trend of price cuts.
Upstream Pricing Power and the Downstream's Passive Role
The dye market offers a clearer reference. Disperse black dye has been raised twice in one month, with a cumulative increase of 5,000 yuan/ton. Dyeing mills in Shaoxing subsequently issued price hike notices, with light-medium colors rising 100-300 yuan/ton and dark colors rising 300-500 yuan/ton. Whether for dyes or polyester filament, upstream giants firmly control pricing power through high industry concentration, leaving weaving and dyeing mills with no choice but to accept the costs.
This structure means that even if crude oil weakens in the short term, raw material costs are unlikely to fall substantially. With an operating rate of only 74.39%, polyester plants can still maintain price floors by controlling output. Downstream texturing machines run at 61.93%, and weaving rates hover around 50%, keeping production and sales roughly balanced. Polyester plants have little incentive to cut prices aggressively.
Future Oil Prices: Volatile, Not Directional
Looking ahead, international oil prices are more likely to remain volatile than to trend in one direction. First, even with limited missile stocks, the US can maintain a blockade of the Strait of Hormuz without heavy ammunition consumption, and as long as strait capacity is constrained, oil prices will struggle to fall significantly. Second, trust between the US and Iran has been severely eroded, making a new agreement unlikely in the near term. During any negotiations, strait shipping will remain under constant threat. Finally, Trump's unpredictable decision-making adds an extra variable, keeping markets oscillating between tension and relief.
Downstream Weaving: Buying Time by Cutting Production
For weaving mills, the cost of many basic fabrics has already inverted. Raw material prices rise more than they fall, eroding margins as a new normal. Amid weak seasonal demand, more factories are choosing to cut production or shut down, attempting to consume inventory and wait for market conditions to improve.
This "buying time" strategy means procurement of raw materials will remain cautious in the near term, potentially putting pressure on polyester plants' sales later. However, given the upstream giants' grip on supply, a major price collapse remains unlikely.