Polyester Filament Sales-to-Production Ratio Hovers at Low Levels: Signals of Supply-Demand Rebalancing Amid Price Resistance

On August 28, the average sales-to-production ratio of sampled polyester filament enterprises stood at 34.7%, up 5.3 percentage points from the previous trading day. At first glance, this suggests a slight market recovery, but disaggregating the data reveals an extreme dispersion ranging from 0% to 500%, signaling not demand revival but a deep stalemate in price negotiations across the supply chain.

The Real Picture Behind the Data

A ratio of 34.7% means that sampled enterprises shipped only about one-third of their output, indicating continued inventory accumulation. More telling is the distribution: most enterprises reported ratios between 10% and 30%, with only a few reaching 40%-50%. The outlier of 500% likely reflects a promotional sale or long-term contract delivery, not a general trend. This long-tail structure suggests a lack of consistent demand support, with transactions occurring as isolated breakthroughs rather than sustained volume growth.

Downstream users' resistance to high prices is the core of the impasse. Since mid-to-late August, polyester filament prices have remained elevated due to cost-side pressures, but terminal weaving orders have not increased correspondingly, significantly suppressing procurement intentions among traders and weaving mills. Public industry data show that loom operating rates in the Jiangsu-Zhejiang region have remained flat for three consecutive weeks without seasonal improvement, confirming that weak demand is not a short-term fluctuation.

Obstruction in Chain Transmission and Rebalancing

The current stalemate fundamentally stems from imbalanced profit distribution across the chain. Upstream PTA and ethylene glycol have remained relatively strong amid crude oil volatility, compressing polyester plants' processing margins. In response, polyester plants have attempted to pass on cost pressures by maintaining high prices, but the weaving sector has countered by reducing operating rates instead of accepting expensive raw materials. This transmission obstruction keeps the sales-to-production ratio low and leads to passive inventory buildup.

Historically, such standoffs are resolved in two ways: either upstream costs ease, allowing polyester margins to recover and then filament prices to drop, stimulating demand; or terminal orders surge before the peak season, forcing downstream to accept current prices. With the traditional 'Golden September and Silver October' only a week away, if orders remain sluggish, polyester plants will likely be compelled to adopt a 'price-for-volume' strategy, potentially triggering a rebound in the ratio.

For buyers, the combination of high prices and low ratios means negotiating leverage is expanding. For plants, prolonged low ratios will test cash flow resilience, possibly prompting some high-cost capacity to cut production, which could help stabilize prices in the medium term.

Practical Recommendations

For Buyers - Leverage the current stalemate to negotiate extended payment terms or modest price concessions, but avoid excessive pressure that might push suppliers to switch production or halt supply. - Monitor PTA and MEG price trends; if cost-side support weakens, consider delaying large orders to secure better prices. - Adopt a phased procurement approach to cover essential needs while avoiding a rush before the peak season, which could drive prices up.

For Mills - Closely track inventory and cash flow; if the ratio remains below 30% for over a week, evaluate production cuts or maintenance schedules. - Differentiated products (e.g., functional or fine-denier filaments) are less affected by price resistance; consider adjusting the product mix accordingly. - Sign monthly contracts with major downstream clients to exchange volume for price stability and secure a baseline ratio.