On the night of August 4, polyester-chain futures contracts experienced a collective sell-off in China's commodity market. The ethylene glycol (EG) main contract expanded its losses from 3% to 6% within just over an hour, finally settling at 4,631 yuan per tonne, marking a record single-day drop. This was not an isolated event: PTA, polyester staple fiber, paraxylene, and bottle chip contracts all weakened simultaneously, with declines generally around 2%. For textile professionals who closely track raw material costs, this is not just a fluctuation in screen numbers—it signals that cost support in the polyester chain is structurally loosening.
Event Background
At the start of night trading, the EG main contract broke through the 3% decline threshold. By 21:02, the drop had widened to 4.06%, with prices falling to 4,727 yuan per tonne. The decline continued, and at 22:15 the contract closed at 4,631 yuan per tonne, a 6% daily drop. Meanwhile, PTA fell 2% to 5,786 yuan per tonne, paraxylene fell 2% to 8,054 yuan, polyester staple fiber fell 2% to 7,280 yuan, and bottle chip contracts dropped over 2%.
From a product linkage perspective, EG leading the decline is not accidental. As a core raw material for polyester production, EG is closely tied to PTA, staple fiber, and bottle chips along the same industrial chain. Any cost-side disturbance transmits quickly. The collective decline is widely interpreted as a market reaction to expectations of loose supply and demand—new capacity releases combined with the traditional off-season for downstream demand have increased inventory pressure.
It's worth noting that night trading sessions typically have thinner liquidity, which can amplify price movements. However, a 6% drop goes beyond technical correction and reflects a repricing of fundamentals by capital. For industrial clients, this sharp decline may signal a procurement window opening, but its duration and rebound risks require careful assessment.
Industry Impact
The decline in polyester raw material prices most directly reduces production costs for downstream weaving and fabric enterprises. For example, with EG dropping about 300 yuan per tonne, and raw materials accounting for up to 70% of costs for greige fabric producers using polyester fiber, there is room for fabric ex-factory prices to adjust downward. In textile clusters such as Shengze, Keqiao, and Nantong, raw material price fluctuations quickly reflect in greige fabric quotations, affecting the profit margins of foreign trade orders.
However, cost declines are not entirely positive. If raw material prices continue to weaken, downstream customers may adopt a 'wait-and-see' attitude, delaying purchase orders and slowing inventory turnover. At the same time, the profit structure of polyester plants will change—some gains from lower raw material costs may be retained downstream, but if end demand remains weak and price transmission is blocked, overall chain profitability still faces pressure.
From a foreign trade perspective, exchange rates and raw material costs are two key variables in export pricing. If this EG plunge extends through the month, it may lead to lower export quotes for polyester filament and staple fiber, temporarily enhancing the price competitiveness of Chinese products internationally. However, overseas clients may demand even larger discounts, squeezing actual profits.