The crude oil market staged a dramatic plunge in early August, with Brent October futures falling as much as 7.3% to $81.55 per barrel, while WTI broke below the $80 mark with a single-day drop of 6.25%. Yet this oil-price storm, triggered by geopolitical rhetoric, barely caused a ripple in the polyester filament yarn market—when upstream feedstock surged, polyester yarn only inched up by 50-100 yuan per day, and when oil prices collapsed, it showed remarkable resilience. This blunting of price transmission is becoming a structural signal that the textile materials market can no longer ignore.
Event Background
The direct driver of this oil price volatility remains US President Trump's repeated statements on Iran. On July 31, he claimed he was "seriously considering" strikes on Iranian energy facilities; two days later, he signaled negotiations with Iran, saying an agreement on the Strait of Hormuz had been reached. This cycle of "rhetoric, reversal, and re-rhetoric" has persisted for nearly six months since the US-Iran conflict escalated in late February, and while market sensitivity to geopolitical noise should have diminished, funds still buy into it, causing oil futures to swing wildly.
Notably, the divergence between oil prices and polyester yarn is not a coincidence. Reviewing the previous cycle of US-Iran conflict, crude oil experienced violent fluctuations, while polyester filament yarn maintained a narrow range. Behind this independent trend lies a shift in the pricing logic of the industrial chain: polyester yarn prices are more determined by their own supply-demand dynamics than by simply following crude oil costs. When upstream feedstock surged, polyester yarn only rose modestly; when oil prices plunged, it showed strong resistance to decline, sometimes remaining completely unchanged.
Industry Impact
Downstream weaving sector purchasing behavior further confirms this decoupling. During the current traditional off-season, loom operating rates are below 50%, with many enterprises lacking stable orders having reduced or halted production. In this context, polyester yarn purchases are essentially just-in-time replenishment, and small price fluctuations have minimal impact on these customers. However, if raw material prices swing violently, even just-in-time buyers may choose to wait and see, further squeezing market liquidity.
Changes in grey fabric inventories provide momentum for a market reversal. Data shows that due to large-scale production cuts in the first half of this year, the average inventory of grey fabrics at mills has fallen by more than 10 days compared with the same period last year. This means that once downstream demand recovers, existing grey fabric inventories may not be sufficient to support the first wave of procurement. More importantly, grey fabric prices often do not wait until inventories are exhausted to rise; when signs of tightening appear, some mills begin to hold back sales, driving prices up.
From a temporal perspective, late August may become a turning point. In the short term, the oil market is likely to remain range-bound, as Trump's erratic statements make it difficult for prices to trend. However, blockades in the Strait of Hormuz and the Bab el-Mandeb Strait have significantly increased crude oil transport costs, exacerbating oil shortages in some countries, which will raise energy costs in the medium to long term. Meanwhile, as the traditional off-season approaches its end, downstream demand is expected to gradually recover, and the buyer's market pattern may shift subtly—when demand picks up amid low inventories, price elasticity will be amplified.