The thermometer of the polyester filament market—the production-sales ratio—gave a warning signal on September 2: 39.1%. This is the average ratio of sampled enterprises, down 0.7 percentage points from the previous trading day, meaning that for every 100 tons produced, only about 39 tons were sold. When this indicator stays below 50% for an extended period, the industry typically enters an inventory accumulation cycle, raising the risk of price wars.
Signals Behind the Data
The 39.1% ratio is not an isolated figure. The distribution across sampled enterprises was highly dispersed, ranging from 0% to 310%. The extreme value of 310% likely corresponds to a few companies' concentrated restocking or order fulfillment, while multiple low values (0%, 5%, 10%) indicate that many enterprises had no transactions that day. This polarization suggests a lack of broad buying interest, with only sporadic rigid demand supporting the market.
Notably, most manufacturers chose to raise quotations despite the declining ratio. This seemingly contradictory move reflects a trade-off between cost support and inventory pressure. The direct raw materials for polyester filament—PTA and MEG—have seen firm prices recently, giving factories little room to cut prices. However, weak demand makes it uncertain whether the higher quotes can be realized. The significant variance in transaction price increases hints that some companies are actually offering discounts to close deals, while others insist on holding prices, indicating a split in market pricing.
Upstream-Downstream Transmission and Industrial Belt Response
The low ratio directly affects the inventory strategies of polyester plants. According to industry norms, if the ratio stays below 40% for several consecutive days, inventories will accumulate passively and may approach warning levels within a month. At that point, regardless of costs, price cuts to destock may become the only option. This pressure is transmitting upstream—procurement of polyester chips and PTA may slow, affecting price expectations across the chemical fiber sector.
Geographically, traders in major polyester filament production and sales areas such as Shengze, Changxing, and Xiaoshan are generally adopting a wait-and-see stance. Weaving mills are operating at around 70% capacity, but new orders are mainly small rigid-demand orders, with large orders yet to appear. The autumn/winter fabric stocking in the end-use garment and home textile markets has not fully started, explaining why most users choose to stay on the sidelines—they anticipate further price declines and are unwilling to lock in orders now.
Short-Term and Long-Term Logic of Price Game
In the short term, the polyester filament market will maintain a tug-of-war between upstream price support and downstream price pressure. Factories are reluctant to concede due to cost support, but if the ratio continues below 40%, inventory pressure will force some enterprises to cut prices first, creating a 'broken window' effect. For buyers, this is not the time for panic buying, but they should also be wary of a rebound once prices approach cost levels.
In the long run, September marks the start of the traditional textile peak season. If orders materialize as expected in late September, the ratio could recover above 60%. However, if end-consumer demand recovers slower than expected, destocking may rely on production cuts rather than price cuts even during the peak season. Industry data suggests that when the ratio stays below 40% for a week, the probability of production cuts rises to 70%. Therefore, the trend of the ratio over the next two weeks is more indicative than single-day price fluctuations.
Practical Recommendations
For Buyers - Stage your purchases: Split procurement into three batches, with the first covering about 30% of your needs. Observe whether the ratio can hold above 50% next week before deciding the next step. - Monitor inventory indicators: If the average ratio of sampled enterprises remains below 40% for three consecutive days, wait for factory discount promotions; if it recovers above 60%, accelerate price locking. - Lock in forward contracts: For orders three months ahead, consider flexible price agreements with factories to mitigate raw material cost fluctuations.
For Foreign Trade Enterprises - Renegotiate price terms: Leverage the current buyer's market to negotiate more flexible payment and delivery terms, such as 'payment 30 days after arrival.' - Diversify suppliers: Compare quotations from different factories, prioritizing those with lower ratios and higher inventory pressure, as they typically have more room for negotiation. - Monitor exchange rate linkage: Polyester filament exports are dollar-denominated. If the RMB appreciates short-term, consider locking in exchange rates in advance to avoid profit erosion.
Markets always seek balance amid volatility. The 39.1% ratio is not an endpoint but the starting point of a new round of negotiation. For industry practitioners, rather than obsessing over daily prices, focus on the two leading indicators—production-sales ratio and inventory—as they often reveal the true market direction more than quotations.