As the Spring Festival approaches, the textile market's year-long season is drawing to a close. However, in the final month before the holiday, a significant divergence has emerged between upstream and downstream sectors.
This year, weaving companies began their holidays earlier than usual. According to data from Longzhong, from January 15th to 20th, downstream industries such as texturing, textiles, and dyeing began their first wave of holiday closures, with most downstream sectors expected to be in holiday mode by the end of January or early February. On the other hand, polyester filament is currently experiencing continuous cash flow losses, leading to a strong willingness among manufacturers to support the market. Coupled with news of production cuts, the polyester filament market has seen a volatile upward trend, with transaction prices continuously rising. Compared to the beginning of the month, the price of POY150D has increased by 2.3%. On January 21st, several polyester factories raised polyester filament prices, increasing some specifications by 50 yuan/ton. On January 22nd, polyester filament prices continued to rise by 50 yuan/ton. Coupled with the expected reduction or suspension of approximately 8 million tons of production during the Spring Festival, the willingness of raw material manufacturers to support prices is very evident.
Therefore, the differing expectations of upstream and downstream industries have led to significant divergences. The continued rise in upstream raw material prices has further exacerbated downstream resistance, gradually plunging polyester filament into a situation of high prices but no market demand.
If the current situation does not change significantly, and both upstream and downstream industries adhere to their current strategies, each going their own way, the situation of high prices but no market demand for polyester filament may continue before the Lunar New Year. Looking at the overall market sentiment, the upstream raw material side reached a consensus on production cuts relatively early. Coupled with the fact that polyester filament factory inventories are still within a controllable range, the price support is expected to continue, although a large-scale promotional campaign in early February cannot be ruled out. On the downstream side, the divergence is relatively more severe. Many weaving enterprises with average operations are currently shut down, while some are still working overtime. Earlier market reports indicated that some products, such as memory foam, began shipping before the Lunar New Year, leading factories to recall workers who had already been on holiday. Some companies that already had sufficient orders are also operating at full capacity. The polarization in the weaving industry in 2025 was vividly demonstrated at the end of the year. Downstream differentiation can generate some demand, but it cannot fully absorb the raw materials produced upstream. Whether upstream manufacturers will ultimately engage in promotional activities largely depends on the inventory accumulation of polyester filament factories in the next two weeks.
If we shift our focus to the period after the Lunar New Year, the key question becomes whether the price of grey fabric can rise. Firstly, from a national perspective, the overall environment supports price increases for finished products. On January 20th, Wang Changlin, Vice Chairman of the National Development and Reform Commission, stated at a press conference held by the State Council Information Office that with both CPI and PPI rebounding, promoting price recovery should be a key consideration in monetary policy, leveraging the integrated efficiency of existing and new policies to foster a virtuous cycle of economic growth and price recovery. However, from a practical perspective, raising prices is not so easy. On the one hand, the biggest losers in the weaving industry are actually some larger enterprises, because their customer base is more stable, and they often have integrated the industrial chain and have greater economies of scale. Even if the market is so volatile, they still have room for profit. Therefore, they would rather rely on price to retain customers and do not have a strong desire to raise prices. On the other hand, the continuous rise in raw material prices is also gradually pushing up the cost line of grey fabric. Coupled with the large-scale production stoppages around the Spring Festival this year, the amount of grey fabric inventory after the Spring Festival may become an important driver of grey fabric price increases.
