Under the New Variables of the Russia-Ukraine Conflict, the Price of Polyester Raw Materials Struggles to Continue the "Fixed Price" Legend

June 5, 2025

Latest company news about Under the New Variables of the Russia-Ukraine Conflict, the Price of Polyester Raw Materials Struggles to Continue the "Fixed Price" Legend
Source: Global Textile Network

 

Since the outbreak of the Russia-Ukraine conflict in 2022, this ongoing war has profoundly disrupted the global economic landscape like a butterfly effect, with multi-faceted and far-reaching impacts on China's textile industry. On one hand, after European companies withdrew from the Russian market, Chinese textiles quickly filled the gap with their superior quality and cost-effectiveness, leading to a surge in exports to Russia. On the other hand, the conflict has severely threatened global crude oil supplies, causing international oil prices to fluctuate wildly like a roller coaster, which in turn has affected the prices of upstream products in the textile industry chain such as polyester raw materials.

 

The escalation of the Russia Ukraine situation has triggered severe market turbulence

Recently, the Russia-Ukraine situation has once again fallen into a vortex of tension. According to CCTV News reports, Ukraine claimed to have launched a special operation on June 1, using drones to destroy 41 Russian strategic bombers. The drones penetrated more than 4,000 kilometers into Russian territory and attacked four strategic bomber bases of the Russian Aerospace Forces. If true, the scale and impact of this incident, as described by Russian military bloggers, are comparable to the "Russian Pearl Harbor Incident." Although Russian media has denied this, the market has already reacted first. Brent crude oil and WTI crude oil prices both soared by approximately 4%, gold spot prices rose by over 2.5%, and silver spot prices rose by over 4%. Risk aversion has rapidly spread in financial markets, fueling concerns about the subsequent development of the situation.

 

Reduced Production Drives Price Hikes in the Polyester Raw Materials Market

In China's textile industry's polyester raw materials market, the polyester filament sector is currently in a production reduction cycle. Earlier this month, leading industry enterprises announced an increase in production reduction efforts, with a second-round reduction of approximately 8%, while also starting to repair the prices of some loss-making filament varieties. Driven by this, some polyester factories had already raised product prices before the holiday. Additionally, the combination of production reductions and promotional activities has effectively alleviated the short-term inventory pressure on leading polyester factories. Looking back at the same period last year, before the off-season arrived, polyester factories broke with convention and adopted a "fixed price" strategy to sell polyester filaments, driving prices to rise against the trend. Now, with upstream crude oil prices surging due to geopolitical factors, polyester factories seemingly have the confidence to raise prices again.

 

Dilemmas of Weaving Enterprises: Unable to Afford High-Priced Raw Materials

However, downstream weaving enterprises in the textile industry chain are facing a completely different situation. In the first half of last year, the grey fabric market was once booming. Although weaving enterprises had thin profits, they significantly reduced grey fabric inventories and improved their financial conditions through the strategy of small profits but high sales volume. Some enterprises even took the opportunity to update equipment and expand production capacity. But this year, the situation has taken a sharp turn. Even if profits remain sluggish,new equipment has become a burden, as a large amount of grey fabric inventory has tied up funds, leaving enterprises unable to bear high raw material prices.

 

Pressured Foreign Trade Demand and Worsening Market Supply-Demand Imbalance

At the same time, against the backdrop of continuous capacity growth, the U.S. tariff policies and restrictions on cross-border e-commerce in many overseas countries have severely suppressed the growth of foreign trade demand, leading to a 加剧的 market supply-demand imbalance and further squeezing the profit margins of conventional grey fabrics. Considering the complex current situation of both upstream and downstream sectors, although upstream polyester factories have a strong willingness to raise prices, the polyester raw materials market is unlikely to replicate last year's "fixed price" market trend due to downstream weaving enterprises' inability to accept the price hikes. The chain reaction triggered by the Russia-Ukraine conflict continues to test the resilience and adaptability of China's textile industry. The future market trends will require continuous attention to the development of the situation and the dynamic adjustments of all links in the industry chain.