On the morning of August 3, international oil prices plunged, with Brent crude for October delivery falling as much as 7.3% to $81.55 per barrel, while WTI dropped below $80, down 6.25%. It was one of the largest single-day declines in recent weeks. During the same period, however, polyester filament yarn prices only adjusted slightly by 50-100 yuan per ton, with some specifications remaining unchanged. The sharp contrast between upstream volatility and downstream moderation reflects structural changes underway in the textile raw materials market.
Decoupling: Why Polyester Filament No Longer Follows Crude Oil?
The price linkage logic between crude oil and polyester filament is weakening. From the previous US-Iran conflict to the current one, crude oil experienced multiple sharp ups and downs, but polyester filament maintained a narrow range. This is not accidental; it is driven by supply-demand fundamentals. Currently, it is the traditional off-season for textiles, with downstream weaving mill operating rates below 50%. Many enterprises lacking stable orders have reduced or halted production, and raw material purchases are mainly for just-in-time replenishment. For such customers, a fluctuation of 50-100 yuan per ton is not a decision-making variable; what truly matters is order visibility.
A deeper reason lies in the inventory cycle. Over the past two years, weaving mills accumulated high inventories, solidifying a buyer's market and disrupting the price transmission mechanism—upstream rises don't trigger downstream follow-ups, and upstream falls don't spur buying. But the massive production cuts in the first half of this year have changed that. Public data show that average greige fabric inventories at mills have fallen by more than ten days compared to the same period last year. Inventory destocking means bargaining power is shifting. Once demand recovers, raw material prices may no longer passively follow crude oil but be driven by supply-demand gaps.
Geopolitical Risks and Transport Costs: Potential Variables in Late August
Crude oil prices are likely to remain volatile in the short term, with the Trump administration's repeated statements being the biggest uncertainty. But more noteworthy is the risk of blockades in the Strait of Hormuz and the Bab el-Mandeb. Even if some oil can be shipped out, transport costs have risen significantly, exacerbating energy shortages in some countries and pushing up chemical production costs. For the textile industry, this implies hidden upward pressure on the cost side of polyester filament, though currently masked by weak off-season demand.
Time is the most critical variable. According to historical patterns, the textile off-season will last about half a month. By late August, downstream demand is expected to pick up marginally. At that point, if greige fabric inventories are insufficient to meet the first wave of orders, mills may hold back sales, causing fabric prices to rise early and transmit upward to raw materials. In other words, the current calm in polyester filament may be the calm before the storm. Buyers should be wary of potential price jumps after demand picks up.
Industry Impact: Can the Buyer's Market Reverse?
Over the past two years, weaving mills lacked pricing power over downstream buyers, primarily due to high inventories. A drop of more than ten days in inventory means the supply-demand landscape is shifting from a buyer's market to a balanced one. Once demand recovers, greige fabric prices will show greater elasticity, driving polyester filament to rise independently. For upstream chemical fiber plants, this means stronger bargaining power; for downstream weaving mills, it means higher raw material costs, requiring early inventory locking.
But the reversal won't happen overnight. The pace of demand recovery in the off-season, the evolution of geopolitical risks, and the willingness of weaving mills to resume production will all affect the transmission speed. Industry insiders expect polyester filament to remain in a narrow range in the short term, but late August may be a turning point. If demand recovers as expected, raw material prices will see a catch-up rise; if not, polyester filament will continue to be constrained by high inventories and weak orders, staying low.