After crude oil prices surged past $100 per barrel, a sharp pullback followed, with PTA plunging over 5% in a single day and some polyester filament yarn prices dropping by 50-100 yuan per ton. For textile downstream players long squeezed by rising costs, this appeared to be a rare moment of relief. However, a deeper look into the supply chain reveals that a temporary raw material dip is far from reversing the cost predicament facing the textile industry.
Background
International crude futures fell more than 6% from the $100 mark, stabilizing around $90. This correction was directly triggered by signs of easing geopolitical tensions. According to public reports, the U.S. paused plans to expand military strikes due to concerns over depleting air defense missile inventories, cooling market fears of supply chain disruptions.
But does this mean polyester raw materials will enter a sustained downtrend? The current industry structure suggests otherwise. The pricing logic for polyester filament yarn has decoupled from simple crude oil cost pass-through, now largely dictated by the market control and pricing strategies of major polyester producers.
Industry Impact
Polyester Sector: Controllable Inventory, Weak Incentive to Cut Prices
Domestic polyester filament yarn operating rates are at 74.39%, not particularly high. Downstream, Jiangsu and Zhejiang draw texturing machine utilization stands at 61.93%, while weaving rates hover around 50%. Supply and demand are roughly balanced, giving mills little inventory pressure. With manageable stockpiles, major producers lack the incentive for sustained price cuts. The recent price softness is more about promotional sales during the crude oil correction window rather than a trend reversal.
Dyeing Sector: Soaring Dye Costs
In stark contrast to the temporary polyester raw material retreat, dye costs are accelerating. Disperse black dye has been raised twice in less than a month, totaling 5,000 yuan per ton. Dyeing mills in Shaoxing have issued price hike notices, with light-medium colors rising 100-300 yuan per ton and dark colors 300-500 yuan per ton, effective August 1. The pricing logic for dyes mirrors that of polyester: a few top players hold strong bargaining power, leaving downstream dyers and weavers with no choice but to accept.
Weaving Sector: Deepening Cost Inversion, Buying Time
For many weaving mills, costs for basic fabrics have long been inverted. Whether raw material prices rise or fall makes little practical difference. During the traditional off-season, more mills are choosing to cut production or even shut down temporarily, hoping to wait out the market until supply-demand dynamics naturally rebalance. This 'buying time' strategy reflects downstream helplessness in the face of upstream pricing power.
Outlook and Practical Recommendations
Looking ahead, crude oil is unlikely to trend in a single direction; it will likely remain volatile. Geopolitical negotiations are slow, shipping lane capacity is constrained, and policy flip-flops add uncertainty. This means the polyester raw material cost center will stay elevated for the foreseeable future.