International oil prices fell sharply after briefly exceeding $100 per barrel, with PTA dropping over 5% in a single day, prompting some polyester plants to reduce polyester filament yarn prices by 50 to 100 yuan per ton. This volatility stems directly from the US decision to delay expanding military strikes on Iran due to depleted air defense missile stockpiles, easing market tensions and pulling crude back from the $100 high to around $90. However, the ripple effects on raw materials are far from over, and the textile industry is facing a new round of cost games across upstream and downstream sectors.
Disconnection and Continuity in Raw Material Price Transmission
The drop in oil prices has not immediately translated into sustained declines in polyester raw materials. The current operating rate for polyester filament yarn remains relatively low at 74.39%, while downstream Jiangsu-Zhejiang texturing machine utilization stands at 61.93% and weaving at about 50%. Production and sales are roughly balanced, leaving polyester plants with little inventory pressure and thus limited incentive to cut prices further. Even with short-term oil price corrections, polyester yarn prices are more likely to see promotional discounts rather than a sustained downtrend.
The situation in dyes is more severe. Disperse black dye has seen two price hikes within a month, totaling 5,000 yuan per ton. Some dyeing factories in Shaoxing have issued price increase notices, effective August 1, with light-medium colors rising 100 to 300 yuan per ton and dark colors 300 to 500 yuan per ton. The logic behind dyes and polyester is similar: upstream giants leverage industry concentration to control pricing, while downstream weaving and dyeing enterprises have weak bargaining power and must passively absorb cost fluctuations.
Geopolitical Uncertainty and Oil Price Outlook
Future international oil prices are likely to remain volatile rather than follow a single direction. Although the US faces ammunition shortages, maintaining a blockade of key straits requires limited ammunition; as long as oil tanker exits are blocked, oil prices will struggle to correct significantly. Moreover, the previous US-Iran memorandum of understanding has been torn up, severely damaging mutual trust and making a new agreement unlikely in the short term. During negotiations, strait shipping capacity will remain constrained. Trump's erratic decision-making style further adds unpredictability to oil price trends.
Survival Strategies for Downstream Enterprises: Trading Time for Space
For weaving enterprises, the cost of many basic fabrics has already inverted. The marginal impact of raw material price changes on profits is diminishing, and the key to survival now lies in cash flow and order stability. More companies are opting for production cuts or holidays to reduce capacity and losses during the off-season, waiting for market supply and demand to rebalance.
- Polyester raw materials are prone to rise but hard to fall; seize short-term promotional opportunities but avoid chasing price increases for stockpiling.
- Dyeing fee increases are a done deal; signing long-term agreements with dyeing mills or locking in prices early can reduce uncertainty.
- Monitor geopolitical dynamics and crude oil inventory data as reference indicators for raw material procurement timing.