On September 4, the polyester filament market witnessed sluggish transactions, with the average sales-to-output ratio among sample enterprises falling to only 21.0%, down 4.8 percentage points from the previous trading day. This figure underscores the growing resistance among downstream buyers to high raw material prices, with purchasing nearly shrinking to essential demand. When the sales-to-output ratio remains below 30% for consecutive days, the fragile equilibrium of the supply chain is being disrupted.
Signals Behind the Data
What does a single-day ratio of 21% signify? In the chemical fiber industry, a ratio below 30% is typically regarded as a warning line for market weakness. The specific data from sample enterprises reveal a wide range from 0% to 40%, with several firms reporting zero sales, indicating a dilemma of having quotations but no transactions. Notably, a 40% ratio appeared at only a few companies, highlighting market divergence—enterprises with cost or product advantages can still secure orders, while smaller manufacturers lacking bargaining power face inventory pressure.
This divergence is not accidental. Since late August, polyester filament prices have remained elevated, while downstream weaving enterprises' profit margins have been progressively squeezed. According to industry public data, the operating rate of water-jet looms in Jiangsu and Zhejiang regions has declined from around 70% in July to approximately 60% currently, with some small and medium-sized weaving mills opting for production cuts or shutdowns to wait and see. The recovery of terminal apparel orders has lagged far behind the pace of raw material price hikes, leading to a transmission bottleneck characterized by "heat upstream, cold downstream."
Upstream-Downstream Bargaining Under High-Price Resistance
Downstream users' resistance is not unfounded. On the cost side, although PTA and MEG prices have slightly corrected, they remain at historically mid-to-high levels, and the cash flow pressure on polyester plants has not eased. However, the strength of upstream raw materials has not effectively translated into increased downstream orders, exacerbating the standoff between buyers and sellers. A fabric merchant in the Shengze area noted that raw material costs now account for over 60% of the total cost of grey fabric, yet fabric selling prices cannot be raised correspondingly, severely compressing profit margins.
This bargaining is reshaping procurement rhythms. The previous flexible "buy-as-needed" model is gradually being replaced by conservative strategies such as "order-on-demand, small quantities, frequent purchases." Some large weaving enterprises have begun to utilize their earlier low-cost raw material inventories to hedge against current high prices, while smaller players prefer to wait for prices to fall to their psychological thresholds. Data from industry institutions indicate that social inventories of polyester filament have climbed to a near two-month high; if the sales-to-output ratio remains low, destocking pressure will intensify.
Chain Reactions of a Sluggish Sales-to-Output Ratio
The persistent low ratio first impacts the cash flow of polyester plants. In the chemical fiber industry, the sales-to-output ratio directly relates to capital turnover efficiency. A ratio below 25% implies a significant reduction in product liquidity, requiring enterprises to allocate more working capital to maintain operations—an added burden for small and medium enterprises already with high debt ratios. Some plants have begun to adjust supply through maintenance or load reduction, hoping to buy time.
For downstream purchasers, the current situation presents both challenges and opportunities. The challenge is that raw material prices remain high, making order profitability difficult; the opportunity lies in price differentials that often emerge during market downturns. Experienced procurement managers are closely monitoring polyester plants' production cut dynamics; once signals of concentrated cuts appear, prices may hit a temporary low, offering a chance for bargain restocking.
Outlook and Strategic Adjustments
In the short term, the polyester filament market will likely maintain a volatile pattern. On one hand, upstream raw material cost support still exists, limiting deep price declines; on the other hand, weak downstream demand caps upward price momentum. Industry analysts generally believe that mid-September will be a crucial observation window—if terminal autumn/winter orders release as expected, the sales-to-output ratio may rebound above 30%; otherwise, the market could face a new round of price adjustments.
Notably, performance across different polyester filament categories will diverge. POY, benefiting from relatively stable downstream draw-texturing demand, may see better sales than DTY and FDY. Additionally, differentiated products such as cationic, flame-retardant, antibacterial, and other functional polyester filaments, due to specific applications, are less affected by cyclical fluctuations and can maintain relatively higher sales-to-output ratios. Enterprises should adjust their product mix accordingly to avoid homogeneous competition.