I. Overall trend last week (July 20-24): Fluctuating upward with steady gains throughout the week; the rise was supported by cost factors and low inventory levels.
Last week, the polyester filament market followed a pattern of testing price hikes early on, surging mid-week on strong sales volume, and stabilizing slightly by the weekend, resulting in a cumulative weekly gain; the overall trend was bullish and sustained, avoiding the "spike-and-retreat" behavior seen previously. The primary drivers were rising international crude oil prices—fueled by geopolitical tensions—which strengthened upstream raw materials, alongside ongoing industry destocking and strong manufacturer resolve to maintain prices; however, the pace of the rise was moderate and gains were uneven, constrained by weak essential demand during the textile industry's off-season.
II. Analysis of Key Drivers
(I) Bullish factor: Upstream costs have strengthened across the board, solidifying the floor of support (the key positive factor).
1. International crude oil prices surged
Amidst geopolitical tensions in the Middle East, Brent crude has firmly established itself above $95 per barrel, hitting a six-week high. As crude oil accounts for over 70% of polyester production costs, the rise in upstream costs has driven simultaneous price increases for PX, PTA, and ethylene glycol. Consequently, polyester plants are facing upward pressure on production costs and are showing a strong willingness to raise their own prices and lock in low-cost feedstock supplies.
2. Tight PTA supply and continued inventory drawdown
Multiple domestic PX and PTA units are undergoing scheduled maintenance, keeping operating rates low and resulting in a decline in commercial inventories for three consecutive weeks. PTA spot prices have trended upward this week, stabilizing within the 5,630-5,650 RMB/ton range, thereby continuing to provide a positive boost to the polyester filament sector.
3. Industry inventories continued to decline; supply is contracting.
Industry inventory levels as of July 24:
POY: 17.1 days (down 0.6 days month-on-month; lowest level since March 2026)
FDY: 22.8 days (down 0.4 days month-on-month)
DTY: 30.4 days (down 3.1 days month-on-month)
With low industry-wide inventory and polyester filament plants operating at only 75.1% capacity (a relatively low load), supplies are tight. Delivery backlogs have emerged for certain high-demand specifications; consequently, plants face no pressure to lower prices and possess strong confidence in maintaining price levels.
4. Short-term speculative restocking drove a rebound in production and sales
A sharp rise in crude oil prices early in the week spurred downstream texturizing plants and traders to engage in periodic restocking; the production-to-sales ratio exceeded 100% on both Monday and Tuesday, while concentrated purchasing further pushed up yarn prices.
(II) Bearish factors: The traditional off-season for the downstream textile industry, with severely insufficient underlying demand.
1. Operating rates for weaving and dyeing remain low
The comprehensive operating rate for weaving in the Jiangsu-Zhejiang region stands at only 53%-65%, while the rate for dyeing and printing is below 50%. Amidst the high temperatures of mid-summer, small and medium-sized weaving mills have generally cut production or implemented rotating shifts to cope with the heat. Orders for greige fabric are scarce; mills are adhering to a "buy-as-needed" and zero-inventory strategy, immediately halting purchases if yarn prices rise and showing no willingness to stockpile for the long term.
2. Scarcity of domestic and export orders
Demand for domestic summer apparel fabrics is winding down, while large-scale orders for autumn/winter fabrics have yet to be placed in volume. Meanwhile, it is the off-season in Europe and the US; limited growth in export orders is insufficient to absorb domestic polyester filament supplies, making it difficult for actual demand to sustain higher price levels.
3. Weakest transmission along the DTY value chain
The DTY segment faces the poorest order intake and the highest inventory levels among downstream texturing operations. Price increases for DTY have significantly lagged behind those of POY and FDY, reflecting a marked divergence in market performance.
III. Short-term Market Outlook (Late July - Early August)
Overall Outlook: Prices are prone to rising rather than falling, though upside potential is limited; the market is expected to trade with a firm tone amidst fluctuations.
Downside capped: A "triple support" structure—high crude oil prices, tightened PTA supply, and extremely low industry inventories—precludes any significant pullback in the short term.
Major surges unlikely: During the off-season, essential demand cannot sustain the high cost of raw materials; once speculative restocking subsides, the momentum for price increases will gradually slow.
Reference Price Ranges
POY: Fluctuating between 8,300 and 8,500 RMB/ton
FDY: Fluctuating between 8,550 and 8,700 RMB/ton
DTY: Fluctuating between 9,400 and 9,600 RMB/ton
Key areas to watch:
① Whether international crude oil prices surge and then retreat;
② Whether bulk orders for autumn/winter textiles materialize in mid-to-late August, which will determine whether market performance can strengthen again in early August.
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