On the night of August 4, the domestic futures market witnessed a systematic sell-off in the polyester chain. The main ethylene glycol (EG) contract fell from 3% at the opening of the night session to a final 6% loss, closing at 4,631 yuan/ton, down about 200 yuan in a single day. Meanwhile, PTA, polyester staple fiber, bottle chip, and paraxylene contracts all dropped around 2%, signaling a broad repricing of the entire polyester sector.
Background
This decline was not an isolated event. Looking at the trading rhythm, EG fell most sharply, breaking below 3% shortly after 21:00 and accelerating within little more than an hour to close down 6%. PTA settled at 5,786 yuan/ton, staple fiber at 7,280 yuan/ton, and paraxylene at 8,054 yuan/ton, each down about 2%. The synchronized decline across multiple products indicates that the market's main trading logic has shifted from single-product fundamentals to macro expectations for the entire chain.
Loosening cost support is the primary driver. Ethylene glycol's main feedstocks are naphtha and coal. Recently, international oil prices have been volatile and trending lower, dragging naphtha prices down and directly weakening EG's cost support. At the same time, China's coal supply and price stabilization policies continue, lowering the cost center for coal-based EG routes. When cost support fails, futures weakness is easily amplified.
Industry Impact
For polyester plants, rapid raw material price declines mean a sharp rise in inventory depreciation risk. Public data from the textile industry shows that ethylene glycol port inventories in East China are at medium-to-high levels. If prices continue to fall, companies holding inventory face book losses. More critically, downstream polyester filament and staple fiber offers may be forced to follow, but terminal weavers' purchasing willingness may not improve, leading to a redistribution of profits along the chain.
Weak demand is the underlying cause. Currently in the traditional off-season, weaving mills are operating at around 60% capacity, purchasing raw materials mainly on a hand-to-mouth basis, with little speculative stocking. As a core raw material for polyester, EG price fluctuations directly transmit to polyester fabric costs. For fabric buyers, falling raw material prices could bring cost benefits, but only if polyester plants are willing to pass them through, which depends on the pace and magnitude of subsequent price adjustments.