On August 6, international oil markets experienced a sharp rally: Brent crude gained over 2% in a day to $80.39 per barrel, while WTI broke above $75 and added another $0.4 to $76.57. Although such single-day moves are not uncommon, for the textile industry this could signal a new phase in cost pass-through—once oil prices hold above $80, the pressure on chemical fiber prices will no longer be confined to futures markets but will translate into higher grey fabric and finished fabric quotes.
Background
The price surge occurred during Asian trading hours on August 6, with both benchmarks climbing about $0.4 within hours, and Brent eventually expanding gains to over 2%. From an industry perspective, oil is the starting point of the polyester chain, and its price fluctuations amplify along the path: naphtha → PX → PTA → polyester → polyester filament/staple. According to public data from China's National Bureau of Statistics, chemical fibers account for over 80% of textile raw materials, and polyester makes up more than 70% of chemical fiber output. This means every $1 change in oil price can theoretically shift polyester production costs by tens of yuan per ton.
Notably, this rally was not isolated. In the previous week, WTI had repeatedly fluctuated in the $73-75 range, with market expectations of tighter supply building up. The breakout on August 6 broke the short-term equilibrium, pushing polyester plants from a 'wait-and-see' stance to a 'forced follow-up' on price hikes. For downstream weaving mills, this means the window for raw material procurement is narrowing—if oil stays high, PTA and ethylene glycol quotes will likely rise within a week, and whether grey fabric prices can follow depends on downstream demand resilience.
Industry Impact
The impact of higher oil prices on the textile chain is distinctly asymmetric. Upstream PX, PTA, and polyester plants hold strong pricing power and can quickly pass on costs through contract and spot price coordination. In contrast, midstream weaving and dyeing enterprises face limited negotiation room due to order pricing and inventory pressure. Industry data shows that polyester filament inventory in Jiangsu and Zhejiang has fallen to below two weeks, a low for the year, giving polyester plants confidence to raise prices. However, grey fabric inventories remain relatively ample, and weavers are seeing their margins squeezed as raw material costs rise while grey fabric prices stay flat.
More importantly, higher oil prices affect export orders. For export-oriented textile firms, if the RMB exchange rate remains stable, rising raw material costs directly compress export margins. For example, if PTA prices rise by 500 yuan per ton, the cost per meter of polyester fabric increases by roughly 0.05-0.1 yuan—a critical variable for low-margin standard products. Exporters without price adjustment clauses in contracts may face the dilemma of 'losing money on every order.'
Additionally, oil price swings affect textile trade through logistics costs. Bunker fuel prices are highly correlated with crude oil, so a jump in oil implies upward risk for international shipping rates, adding another layer of cost pressure for export-dependent textile firms. Overall, the transmission effect of this oil price surge will gradually manifest over the next 2-4 weeks, with chemical fiber prices, grey fabric quotes, and export offers likely adjusting in tandem.