The collapse on the cost side is transmitting faster than expected to the midstream of the chemical fiber sector. On May 14, the spot price of polyester staple fiber in Jiangsu dropped 105 yuan in a single day, with mainstream transaction prices falling to 8,050 yuan/ton and the trading range narrowing to 8,000-8,100 yuan/ton. Some low-end cargoes even broke through the 8,000 yuan threshold. This marks the largest single-day drop in the staple fiber market since May began, driven by a dual squeeze of collapsing upstream feedstock costs and cautious buying downstream.
Cost Pass-Through Accelerates
The direct trigger for this sharp decline is the rapid downturn in upstream raw material prices. From an industrial chain perspective, the main feedstocks PTA and MEG have weakened continuously after the May Day holiday, leaving the polyester cost side without support. When raw material prices fall in a sustained manner, staple fiber mills are often forced to follow suit to maintain cash flow, but the 105 yuan single-day drop still surprised most market participants.
Data shows that the current spot price of 8,050 yuan/ton is close to the low point seen in mid-March this year. Notably, the processing spread between staple fiber and its feedstocks is shrinking rapidly. Based on average industry processing costs, some small and medium-sized staple fiber producers have seen their margins slip from marginal profitability at end-April to below breakeven. This means that if feedstock prices continue to fall, mills will face the real choice of cutting output or shutting down.
Industrial Cluster Reaction and Procurement Logic Shift
Jiangsu, as a key concentration area for domestic polyester staple fiber capacity, has felt the direct impact of this price volatility. After the sharp price drop, downstream weaving mills quickly shifted to a conservative procurement stance. Industry data shows that loom operating rates in the Jiangsu-Zhejiang region in early May were about 3 percentage points lower than in April, while staple fiber inventory days rose 1.5 days month-on-month.
The logic of buyers is undergoing a fundamental change. In a single-price downtrend, downstream companies generally adopt a wait-and-see strategy of 'buying on rising, not on falling,' actively reducing raw material inventories and compressing procurement cycles to 3-5 days. This short-order, zero-inventory approach further exacerbates the selling pressure on staple fiber mills, creating a negative loop of 'price falls → buyers wait → inventories rise → prices fall again.'
On the demand side, home textile and apparel fabric orders did not show the expected restocking wave during the traditional second-quarter off-season. On the external front, destocking in European and US markets is slow, with some export-oriented weaving mills reporting an 8%-10% year-on-year decline in foreign orders. Domestic demand is constrained by weak consumer spending, with apparel brands continuing to increase pressure on upstream raw material prices.
Short-Term Outlook
Combining cost and supply-demand factors, the staple fiber market is likely to remain in a weak consolidation pattern through late May to early June. On the cost side, supply pressure from PTA and MEG has not yet been fully released, and the entire polyester chain remains in a destocking channel. On the supply side, if planned maintenance at staple fiber mills is executed as scheduled, it may temporarily ease oversupply, but persistent processing losses will force more capacity to be actively reduced.
For buyers, although the current price range offers some margin of safety, the risk of large-scale bargain hunting remains high before costs stabilize. A phased, short-cycle procurement strategy is recommended, with close attention to PTA futures prices as a reference anchor.