On the morning of August 3, the international crude oil market suffered a sharp single-day decline, with Brent's October futures contract falling as much as 7.3% to $81.55 per barrel, while WTI crude also dropped below $80 per barrel, down 6.25%. This was one of the most violent fluctuations in the oil market recently, yet surprisingly, the sharp drop in upstream raw materials did not trigger an equivalent decline in the polyester filament market. Polyester filament prices only eased slightly, with some specifications remaining unchanged. Behind this divergence, the pricing logic of the supply chain is shifting from cost-driven to supply-demand dominated, and subtle changes in the inventory cycle may be building momentum for a market turnaround in late August.
Raw Material Transmission Fails: Polyester Filament Shows Independent Trend
The price transmission chain between crude oil and polyester filament has long been a core logic in the chemical fiber industry. However, since the last US-Iran conflict ended and the current one began, polyester filament has almost moved independently: when upstream raw material prices surged, filament prices only rose slowly by 50 to 100 yuan per ton per day; when crude oil plunged, filament fell even less, or even remained stable. This asymmetric transmission reflects that the pricing power of polyester filament is no longer solely determined by the cost side, but more by its own supply-demand pattern.
From the demand side, the purchasing behavior of downstream weaving enterprises also confirms this judgment. During periods of rising filament prices, some companies would replenish stocks moderately; but when both crude oil and filament prices fell, downstream purchasing willingness dropped to a freezing point. This is not simply a psychological phenomenon of "buying on rising, not on falling", but because the industry is currently in the traditional off-season, with weaving machine operating rates below 50%. Many enterprises lacking stable orders have already reduced or halted production, and raw material procurement is only for essential replenishment. For these essential-demand customers, small price fluctuations hardly affect their procurement rhythm, but if fluctuations become too large, they may actually suppress replenishment demand.
Inventory Cycle Reversal: Greige Fabric Stock Down Over 10 Days
The truly noteworthy variable is the inventory reduction brought by sustained production cuts at the weaving end. Industry public data shows that since the first half of this year, weaving enterprises have cut production on a large scale, and the average greige fabric inventory at factories has dropped by more than 10 days compared to the same period last year. This figure may seem small, but in the context of a long-term buyer's market, it could become a key lever to break the price deadlock.
For a long time, the main reason weaving enterprises lacked bargaining power with downstream buyers was high inventory. High inventory means enterprises are eager to ship goods, so price discourse naturally shifts away. Now, the significant decline in greige fabric inventory means that once downstream demand picks up, the market may not have enough time to replenish stocks, and price elasticity will quickly amplify. More importantly, greige fabric prices often do not wait until inventory is fully depleted to rise; when signs of imminent depletion appear, some enterprises begin to hold back sales, pushing prices up in advance.
Meanwhile, geopolitical risks are transmitting to physical trade through shipping costs. The blockade of the Strait of Hormuz and the Bab el-Mandeb Strait has greatly hindered crude oil transportation. Even if some oil can be shipped out, transportation costs have risen significantly. This cost pressure has not yet directly reflected in filament prices, but it will gradually push up the landed cost of the entire petrochemical chain, providing support for future raw material prices.
Time Window: Late August May See a Turning Point
Overall, in the short term, the crude oil market is likely to remain volatile, with the Trump administration's repeated statements continuing to cause fund-side fluctuations, but it is difficult to form a unilateral trend. Polyester filament prices, under weak supply and demand, are expected to continue fluctuating slightly. However, time is the biggest variable.
According to traditional experience, the textile off-season will last for more than half a month. During this period, downstream demand is unlikely to improve significantly, but as time goes by, two positive factors are accumulating: first, the support effect of rising transportation costs on raw material prices is gradually emerging; second, the continued destocking of greige fabric inventory makes the market much more sensitive to demand recovery. By late August, if downstream orders show seasonal recovery, greige fabric prices may rebound first, thereby driving filament prices to rise independently.
For all parties in the supply chain, this is a critical window to reassess inventory strategies.