China Galaxy Securities released a research report stating that in the long term, downstream textile and apparel demand growth for polyester filaments remains relatively stable. The industry's production peak has passed, and under leading companies' self-disciplined constraints, future industry supply may become more orderly. Currently, polyester filament price spreads are still operating at historically low levels, with room for upward recovery. In the short term, polyester filament manufacturers, textile companies' raw material stockpiling, and grey fabric inventories are all at relatively low levels. Following seasonal patterns, the second-half demand peak is expected to gradually start from August. Additionally, Q4 2025 crude oil inventory buildup expectations are difficult to disprove, with limited upward cost pressure anticipated. Under the "anti-involution" trend, polyester filament cyclical elasticity deserves attention.

China Galaxy Securities' main viewpoints are as follows:

**Polyester Filaments: A Key Synthetic Fiber Variety**

Polyester, also known as polyester fiber, is a synthetic fiber obtained through spinning polyester condensed from PTA and MEG raw materials. The polyester filament industry chain extends from petrochemicals upstream to textiles and apparel downstream. According to JLC statistics, in 2024, 50% of polyester filaments were used in apparel textiles, 31% in decorative textiles, and 19% in industrial textiles.

**Supply: Capacity Growth Gradually Slowing, Leading Companies' Market Share Rising**

In recent years, driven by private leading companies' "refining-chemical integration" strategies and supported by domestic consumption and export demand, capacity across PX-PTA-polyester segments expanded significantly. Polyester filaments, as a major polyester product, entered rapid capacity expansion, with new capacity mainly concentrated among leading companies. According to JLC data, the industry's CR4 reached 60.2% in 2024, up 18.3 percentage points from 2019.

2023 marked the peak of polyester filament capacity expansion, while 2024 saw the industry's actual capacity decline for the first time. Under industry self-regulation, future supply increases are expected to be more orderly. Long-term, market efficiency, policy guidance, and industry self-regulation are expected to dominate supply patterns, with integrated leading companies' competitive advantages likely to gradually emerge.

**Demand: Textile and Apparel Growth Relatively Stable, Capitalizing on Seasonal Fluctuations**

Medium to long-term, global textile and apparel consumption shows resilience with expected steady growth. In H1 2025, China's clothing, footwear, needlework, and textile retail sales increased 3.1% year-over-year, while cumulative textile and apparel exports grew 0.8%, remaining relatively stable overall.

Meanwhile, China's polyester filament exports account for approximately 10% of apparent consumption, with export volume CAGR of 9.6% from 2017-2024. In H1 2025, China's polyester filament exports grew 10.8% year-over-year, maintaining good momentum.

Short-term, the August polyester filament peak season is expected to gradually commence. Currently, polyester filament, textile, and grey fabric inventories are all at relatively low levels. As downstream autumn-winter orders are gradually placed, downstream companies still have stocking space, with polyester filament demand momentum expected to strengthen seasonally.

**Costs: Raw Material Supply-Demand Expectations Weak, Focus on Oil Price Guidance**

Both PX and PTA are oil-based products. With rapid domestic private refinery development since 2018, China's PX and PTA industries entered capacity expansion phases. PX import dependency fell from 60.8% in 2018 to 20.0% in 2024, while PTA shifted from net imports to net exports. Industry oversupply pressure gradually emerged with profits compressed, strengthening PX and PTA absolute price correlation with oil prices.

Short-term, crude oil prices showed relative strength supported by peak consumption season and geopolitical uncertainties. However, global oil inventory buildup expectations for Q4 2025 remain difficult to disprove, limiting oil price upside and potentially gradually reducing polyester filament cost pressures in the distant term.

**Profitability: Industry Has Self-Regulation Foundation, Price Spread Bottom Demonstrates Resilience**

China's polyester filament industry has good self-regulation experience. Since May 2024, leading companies have successively implemented "production curtailment for price support" and "coordinated capacity utilization" to flexibly adjust market supply, achieving inventory reduction and profit recovery.

From execution results, polyester filament price spreads have rebounded from 2023 lows, particularly maintaining strong profitability resilience for mainstream POY products amid complex international trade conditions in H1 2025.

For investment targets, attention is recommended for Xinfengming (603225.SH), Tongkun Co., Ltd. (601233.SH), Hengyi Petrochemical (000703.SZ), and others.

**Risk Factors**

Risk of significant raw material price increases: Oil price levels highly influence chemical industry profitability. Escalating geopolitical conflicts could cause unexpected oil supply disruptions, driving international oil prices significantly higher and intensifying cost pressures for most chemical companies, potentially adversely affecting corporate profitability.

Risk of downstream demand falling short of expectations: Under the overall oversupply pattern in chemicals, if domestic demand stimulus policies prove ineffective and terminal demand remains persistently weak, this could reduce chemical companies' pricing power, suppress chemical product prices and spreads, adversely affecting chemical industry profitability.

Risk of project production falling short of expectations: Under stricter safety and environmental regulatory policies, chemical capacity construction project approval and construction cycles have generally lengthened. If new project commissioning progress falls short of expectations, this could affect related companies' current performance releases.

Risk of intensifying international trade friction: China's textile and apparel industry has high external dependency. Escalating international trade friction could pressure polyester filament terminal demand, indirectly affecting upstream polyester filament companies' normal operations.