Polyester Filament Sales-to-Production Ratio Plunges: Squeezed by High Costs and Weak Demand

On September 3, the polyester filament market delivered a worrying signal: the average sales-to-production ratio of sampled enterprises stood at only 25.8%, down 13.3 percentage points from the previous trading day. This figure not only reflects sluggish buying on that day but also exposes the deep game between upstream and downstream over costs and demand. When high polymerization costs coincide with weak terminal orders, the price pass-through mechanism of polyester filament faces a serious test.

Background

The sales-to-production ratio is a core indicator measuring the match between daily sales and output. An average of 25.8% implies that over 70% of output failed to convert into same-day sales. The disclosed sample data shows ratios ranging from 0% to 90%, with most concentrated between 10% and 30%, occasionally reaching 40%, 50%, or even 70%, but the overall distribution shows a clear long-tail pattern. This extreme divergence indicates that the market is not entirely stagnant but has significant structural differences—some enterprises maintain higher shipments due to customer loyalty or product differentiation, while most face inventory pressure.

Notably, the 13.3-percentage-point drop in the ratio is not an isolated event. Given persistently high polymerization costs, polyester filament manufacturers attempted to transfer cost pressures through price hikes, but downstream users showed obvious resistance, slowing procurement. Cost-push price increases often have limited effect during weak demand, and the sharp decline in the sales-to-production ratio is a concentrated reflection of this logic.

Industry Impact

For upstream polymerization plants, high costs should ideally be passed down through filament prices, but the low ratio indicates a blockage in the transmission chain. If filament manufacturers insist on holding prices, they may further suppress transactions and cause inventory buildup; if they cut prices, profit margins will be severely squeezed. This dilemma forces enterprises to weigh volume against price, and the market may remain in a stalemate in the short term.

For downstream weaving and trading sectors, the fluctuation in the ratio directly affects raw material procurement strategies. Current sluggish buying reflects not disappearing demand but downstream resistance and wait-and-see attitudes toward high prices. In the absence of obvious recovery in terminal orders, downstream tends to maintain low raw material inventories, avoiding price drop risks through just-in-time purchases. This mentality in turn exacerbates sales pressure for filament enterprises, forming a negative feedback loop.

From a broader perspective, the low ratio is closely linked to the overall recovery pace of the textile and apparel supply chain. Fluctuations in export orders, the strength of domestic consumption recovery, and seasonal factors all influence downstream restocking willingness. September is usually the starting point of the traditional peak season, but current data does not show such characteristics, which may imply that this year's peak season performance needs to be questioned.

Practical Suggestions

For Buyers - Closely monitor changes in polymerization costs and filament price spreads. When the spread narrows to historical lows, consider building raw material inventories in batches to lock in relatively low costs. - Watch the trend of the sales-to-production ratio over consecutive days. If it remains below 30%, manufacturers may increase promotional efforts, offering better procurement windows. - When signing monthly or quarterly contracts with suppliers, include price adjustment clauses to cope with drastic cost fluctuations.

For Foreign Trade Enterprises - Incorporate floating price mechanisms in quotations to avoid profit erosion due to short-term raw material price fluctuations while enhancing customer trust. - Use the current domestic price stalemate to actively expand overseas orders, especially paying attention to demand changes in emerging markets such as Southeast Asia and South Asia. - Strengthen exchange rate risk management. Under dual fluctuations in costs and prices, lock in forward exchange or use RMB settlement to reduce uncertainty.