The expected easing of international oil prices is pulling the polyester industry chain back from sentiment-driven speculation to reality. Morgan Stanley has twice lowered its oil price forecast within two weeks, anchoring the average Brent crude price for Q3 and Q4 at $75 per barrel. This price level makes the cost ceiling for polyester filament yarn clearly visible, fundamentally shifting the logic of upstream-downstream bargaining in the polyester sector.
Cost Support Weakens, Promotion Tools Lose Effectiveness
After the reopening of the Strait of Hormuz, oil tankers stranded in the Persian Gulf have gradually resumed transit, alleviating the short-term energy supply crisis. Oil prices no longer have the conditions to surge by 50% within days, as they did after the Spring Festival, stripping polyester factories of their strongest cost-driven pricing power. Meanwhile, the market's response to "big promotions" is rapidly dulling. A promotion event on June 29 saw the daily sales-to-production ratio hover around 70%, only to plummet to about 30% the following day. Compared with past promotions that could still briefly achieve full sales, downstream purchasing appetite has hit rock bottom, limited to small replenishments at low prices with no intention of bulk stocking.
High Inventory Pressure, Minimalist Operation at Weaving Mills
Inventory data from polyester factories is flashing warning signals. Industry inventories of POY, FDY, and DTY have climbed to 30 days, 35.7 days, and 41.8 days, respectively, and are still accumulating. However, the behavioral logic of downstream weaving mills has fundamentally changed—no orders, no machine startup. After two years of squeezed margins, companies have limited room to maneuver, and operational flexibility is extremely poor. The balance point between fabric inventory and fresh grey fabric is still in negotiation, and the price transmission chain is nearly broken. Although polyester factories lack incentive to cut prices due to high raw material costs, the mounting inventory pressure raises the possibility of more aggressive destocking or sustained price declines.
Potential Elasticity Under Low Inventory
Notably, the entire textile industry chain is currently cautious in stocking. Production capacity in the first half of the year was relatively limited, leaving finished product inventories at historically low levels compared with the past two years. This low-inventory setup is a double-edged sword: in weak demand, it means the order reservoir is extremely dry; but once demand recovers, the low inventory could quickly trigger supply-demand mismatches, restoring price elasticity for fabrics. Last year's post-Spring Festival explosion of "New Chinese-style" fabrics is a classic example of a breakout product driving chain-wide destocking and price recovery.
Waiting for a Breakout, Watching for Payment Risks
In the short term, the market is waiting for a trigger. Summer sun-protection clothing was once highly anticipated, but frequent heavy rainfall and delayed high temperatures in China this year have significantly postponed related demand. In the second half of the year, if a breakout product similar to "New Chinese-style" emerges, or seasonal factors provide a boost, price elasticity in a low-inventory environment could be activated. However, before the market truly turns, the industry must remain vigilant. May and June were tough for textile players, with shrinking profit margins and rising risks of bad debts and payment defaults. The lower the market, the higher the risk of some companies resorting to unconventional tactics. Payment security should be the top operational priority.