On June 24, the chemical fiber industry witnessed a data inflection point worth vigilance: spurred by proactive price-cutting promotions at multiple polyester filament yarn (PFY) plants, the average production-sales ratio among sample enterprises rebounded to 45.6% from the previous trading day's 34.2%. While the single-day gain of 11.4 percentage points appears encouraging, the absolute figure remains below the industry's 50% boom-bust line, signaling that the market has yet to enter an active restocking phase.
Price-driven turnover recovery: sustainability in doubt
Looking at the published production-sales data distribution, the ratio on that day showed a clear divergence: the highest reached 150%, the lowest only 10%, with the middle tier concentrated in the 30%-70% range. This pattern—a handful of top players seeing blowout orders while the majority languish in light trading—indicates that price promotions have not stimulated demand uniformly. Only small and medium-sized weaving enterprises with high price sensitivity have been attracted, while large-scale buyers remain on the sidelines.
More critically, a 45.6% ratio still means that over half of the day's output is converted into inventory. Against the backdrop of narrow-range oscillations in feedstock prices for PTA and MEG, the room for PFY plants to offer discounts is shrinking. If cost-side pressures do not ease, this volume-for-price strategy is unlikely to be sustainable, and will likely trigger a new round of capacity adjustments.
Inventory pressure transmits upstream, intensifying supply chain bargaining
The current transmission logic in the chemical fiber chain is already clear: terminal apparel export orders did not see the anticipated 'rush to export' surge at the end of Q2, leading to cautious stock preparation by fabric traders. Inventory pressure at the fabric level has forced weaving enterprises to reduce operating rates, which in turn curtails their purchases of PFY. The June 24 price cuts were essentially a passive choice by PFY plants after inventories breached their safety margins.
Feedback from regional industrial clusters—such as Wujiang, Changxing, and Cixi—indicates that grey fabric inventories generally stand at 25-30 days, above the normal level of 15-20 days. This means downstream players are unlikely to generate sustained restocking momentum in the short term. Even if PFY prices fall another 5%-8%, weaving enterprises are more likely to adopt a 'buy-as-you-go' approach rather than hoarding, as long as end-user orders do not show substantive improvement.
Key node for supply-demand rebalancing: can Q3 bring a turning point?
Following historical patterns, July-August is traditionally a slack season for PFY, but this year's situation is more complicated. On one hand, the release of new upstream PX capacity will compress PTA processing margins, opening some room for PFY cost-side declines. On the other hand, European market resistance to Xinjiang cotton continues to influence fabric export structures, indirectly suppressing demand for conventional categories such as polyester taffeta and pongee.
Industry public data shows that as of June 24, the average equity inventory at PFY plants stood at 14-16 days, up from 11 days at end-May. If the price promotions from late June to early July fail to compress inventories back below 10 days, the industry may face a self-regulatory 'production cut to defend prices' campaign. At that point, the spread structure among POY, FDY, and DTY will adjust, creating a window period for foreign trade enterprises that lock in prices.