International crude oil prices plunged over 6% on June 26, triggering sharp volatility in polyester raw materials. PTA futures fell more than 5% that day, prompting some polyester plants to cut selected polyester filament prices by 50-100 yuan/ton. But does this raw material pullback signal a turning point in the cost pressure that textile mills have been enduring? The answer may not be optimistic.
The Short-Term Effect of Geopolitical 'Cooling'
The immediate trigger for the crude oil plunge was a phase of easing in geopolitical tensions. According to public reports, U.S. President Donald Trump postponed expanding military strikes against Iran, mainly due to concerns over depleted Pentagon air-defense interceptor stockpiles in the Middle East and fears that escalation would invite fiercer retaliation. This signal quickly cooled market panic about crude supply disruptions, pulling oil prices from a high of $100/barrel back to around $90.
For the textile industry, this means the panic premium on polyester raw materials has been temporarily squeezed out. However, looking further ahead, the sustainability of this pullback is questionable. The core contradiction in the Middle East—the safety of navigation through the Strait of Hormuz—remains fundamentally unresolved. Even with limited military ammunition, maintaining a blockade of the strait requires far fewer resources than a full-scale war, meaning the 'throat' of oil supply remains fragile.
The 'Stagflation' Trap of Cost Transmission
The easing at the raw material end has not immediately translated into profit margins for downstream textile mills. The pricing logic of polyester plants has long ceased to rely solely on short-term crude oil trends. Domestic direct-spun polyester filament operating rates stand at 74.39%, while downstream Jiangsu-Zhejiang texturing machine composite utilization is only 61.93%, and weaving utilization has dropped to around 50%. Production and sales are basically balanced, leaving polyester plants with no significant destocking pressure, providing strong price support.
A more thorny issue comes from the dyeing sector. Disperse black dye has been raised twice within a single month, accumulating a total increase of 5,000 yuan/ton. Dyeing mills in the Shaoxing area have issued price hike notices, effective August 1, with light-medium colors rising 100-300 yuan/ton and dark colors rising 300-500 yuan/ton. The common logic for both dyes and polyester filament is that upstream giants firmly control industry pricing power, while downstream weaving and dyeing enterprises have almost no bargaining room and must passively absorb cost pressure.
The 'Passive Defense' Strategy of Industrial Clusters
Faced with the 'easier to rise than fall' nature of upstream raw materials, weaving mills in Jiangsu and Zhejiang are adopting the most pragmatic response: cutting output and idling capacity. Currently, production costs for most basic fabrics are already inverted against selling prices. The marginal impact of raw material price fluctuations on actual profits has become blunt. Enterprises choose to lower utilization rates, buying time to wait for a resonance between inventory depletion and demand-side improvements.
The effectiveness of this strategy depends on two variables: first, whether crude oil can enter a sustained downtrend instead of oscillating; second, whether end-user textile and apparel orders can see a substantive recovery after the traditional off-season. Currently, the remaining trust between the U.S. and Iran has been largely exhausted, and new negotiations will require greater effort. Coupled with the unpredictability of Trump's policy style, the direction of crude oil prices remains unclear.