On August 28, the average sales-to-output ratio in the polyester filament market stood at 34.7%, up 5.3 percentage points from the previous trading day, yet still within the lower range of the year. More concerning is that this improvement was not driven by demand recovery but by a technical rebound from earlier extreme lows—the ratio ranged from 0% to 500% across sampled enterprises, with a median of only 20%, indicating that most mills actually saw sluggish sales.
What the Data Really Shows
What does a 34.7% average sales-to-output ratio mean? Simply put, for every 100 tons of polyester filament produced that day, only about 35 tons were sold, with the remaining 65 tons adding to inventory. This level is well below the industry-recognized 80% threshold and roughly 15 percentage points lower than the three-year average for the same period. Among sampled companies, only two exceeded 100%, while nearly 60% fell below 20%, widening the gap between leading mills and smaller players.
More intriguing is the divergence between the ratio and price trends. Conventional logic suggests that low sales-to-output ratios should prompt mills to cut prices to clear inventory, but prices remained largely stable, showing a stalemate. This volume-price divergence reflects intense upstream-downstream bargaining: upstream polyester plants, facing high feedstock costs, are reluctant to concede, while downstream weaving mills, burdened by weak orders and rising finished-goods inventories, refuse to restock at high prices. Both sides are waiting for the other to move first.
Bottlenecks in Supply-Chain Transmission
Polyester filament sits mid-stream in the polyester value chain, with its price and sales directly influenced by both ends. Upstream, PTA and MEG prices have remained high and volatile, squeezing processing margins and strengthening mills' resolve to hold prices. Downstream, weaving mills in Jiangsu and Zhejiang have seen operating rates decline for three consecutive weeks, with some small and medium factories resorting to reduced schedules, limiting raw material purchases to essential needs and virtually eliminating speculative buying.
This dual pressure has trapped the polyester filament market in a classic 'high-cost, low-demand' vise. For polyester plants, output cuts are an option but constrained by long-term contracts and continuous operation requirements. For downstream weavers, even if raw material prices soften, weak end-demand for garments dampens any incentive to build inventories. Inventory pressure is shifting from the middle to both ends of the chain, and whoever blinks first may trigger the next move.
Event Impact and Industry Signals
August 28 data is not an isolated event but a microcosm of the downstream chemical fiber market in the second half of the year. Since July, the sales-to-output ratio has repeatedly fallen below 40%, with average inventory days climbing above 25, approaching warning levels. This sustained low ratio is reshaping market dynamics: some polyester plants are experimenting with unconventional sales strategies such as 'one-price' or promotional discounts to stimulate volume, while traders and futures players exploit basis trades, adding to price volatility.
For buyers, the current environment presents both challenges and opportunities. The challenge lies in greater price uncertainty, risking purchases at peaks; the opportunity is that some cash-strapped mills accept large-order negotiations, offering leverage for well-capitalized buyers. For export-oriented weaving enterprises, RMB exchange-rate fluctuations and order shifts to Southeast Asia necessitate more refined inventory management to protect thin processing margins from raw-material price swings.