Affected by the news that the United States launched air strikes on three nuclear facilities in Iran and the Iranian parliament believed that the Strait of Hormuz should be closed, NYMEX WTI crude oil soared at the opening, once rising by more than 6%. The increase in polyester costs caused by the geopolitical conflict in the Middle East continues. Under the influence of crude oil, some polyester factories continued to raise the price of polyester filament on the 23rd, with an increase of about 50 yuan/ton. However, from the perspective of futures, the overall fluctuations of futures varieties such as PTA, ethylene glycol, and polyester staple fibers are relatively limited.
On the 22nd, US President Trump posted on social media, openly advocating regime change in Iran. Trump posted three posts on the "real social" platform, one of which wrote: "It is not politically correct to use the term 'regime change', but if the current Iranian regime cannot 'make Iran great again', then why can't the regime be changed?" On the same day, US Secretary of State Rubio denied in an interview with CBS that the Trump administration was seeking to promote regime change in Iran. In another post, Trump praised the US military's attack on nuclear facilities, saying that the damage to Iran's nuclear facilities was "huge", "the attack was both fierce and precise", and the US military "demonstrated superb skills". The last post announced that the US B-2 bomber that carried out the strike had landed safely in Missouri. Although Trump is full of nonsense, the Iranian regime may react more violently after being threatened, causing further escalation of the conflict.
According to CCTV News on the 22nd, Kusari, a member of the National Security Committee of the Iranian Parliament, said that the Iranian Parliament has concluded that the Strait of Hormuz should be closed, but the final decision lies with the Supreme National Security Council of Iran.
The Strait of Hormuz is located between Oman and Iran, connecting the Gulf of Oman in the east and the Persian Gulf in the west. It is the only sea route for oil from the Gulf region to be transported to all parts of the world. About one-third of the world's seaborne crude oil trade passes through the Strait of Hormuz. On the morning of the 22nd local time, the Yemeni Houthi armed forces issued a statement condemning the US military action against Iran, saying that it was inconsistent with international law and the UN Charter and was a blatant and brutal aggression. The Houthi armed forces said that in view of what the United States has done, they will resume attacking US ships in the Red Sea. Institutions predict that if the Strait of Hormuz is closed, crude oil prices are at risk of reaching $120.
Last week, the conflict between Israel and Iran continued to escalate, causing severe turbulence in the global shipping market. The United States is considering launching a military strike against Iran, and Iranian officials responded that they might lay mines in the Strait of Hormuz. Panic in the shipping market has been ignited. The Baltic Heavy Oil Tanker Index shows that the average international freight rate has risen by 12% in the past week. The freight rates of some high-risk routes, such as the Persian Gulf to Europe route and the Asia to Europe route through the Red Sea, have increased by as much as 2.5 times. The daily rental of supertankers has soared from about US$20,000 a week ago to US$55,000. The escalating situation has also forced shipping giants to respond quickly. Maersk announced on the 20th local time that it would suspend its ships from docking at the Port of Haifa in Israel. Following the general increase in global route freight rates in June, Maersk, CMA CGM and Hapag-Lloyd and other companies issued price increase letters for July, and freight rates are expected to continue to rise. Some shipping experts said that shipping companies have begun to "avoid" the Strait of Hormuz, and a detour strategy similar to the Red Sea crisis in 2023 may be repeated. At that time, major global shipping companies were forced to suspend the Red Sea route and detour the Cape of Good Hope in Africa, which extended the transportation time by 10-14 days and significantly increased transportation costs.
The main problem encountered by the polyester industry at present is the contradiction between the tightening demand in the downstream and the rising costs in the upstream. Since the cost increase is caused by force majeure such as geopolitical conflicts, the price increase of polyester factories is often a passive increase under cost pressure, but this increase is unsustainable by the downstream industry at this stage. Due to the excess capacity after the expansion of downstream production, in the absence of a significant improvement in the overall market environment, it can only rely on low prices to expand sales and digest excess capacity. Not to mention whether the price can go up or not, even if the price really goes up, the problem caused by the reduction in demand is even more unbearable for the downstream at this stage. But on the other hand, the increase in costs such as raw materials and freight is inevitable, and the scale of production reduction in the downstream may exceed expectations in the future.
