On June 24, the average sales-to-production ratio of polyester filament sample enterprises was only 45.6%. Although this figure rebounded 11.4 percentage points from the previous trading day, it remains below the industry-recognized safety line of 60%. More concerning, of the 22 sample enterprises surveyed, 15 had ratios below 50%, with six even falling below 30%.
What does this mean? The chemical fiber industry is facing a serious mismatch between production and sales. According to publicly available industry data tracked by Texworld, polyester filament factory inventories have generally climbed to over 20 days, with some large plants exceeding 30 days. If end-user demand does not pick up in time, a new wave of production cuts and shutdowns is likely in the third quarter.
Price Cuts: A Temporary Fix or Market Survival?
The direct driver of the day's sales rebound was price-cutting promotions by some factories. Market feedback shows that factories with larger price cuts saw significantly higher sales ratios, with some reaching 150%, while those maintaining prices stayed at low levels of 10% to 30%. This divergence clearly indicates that downstream weaving mills' purchasing willingness is extremely fragile and price-sensitive.
However, the price-cut strategy comes at a cost. Profit margins in the polyester filament sector are already thin, and sustained price cuts will directly erode corporate cash flow. For small and medium-sized chemical fiber plants, price promotions are essentially trading short-term sales for long-term losses. More critically, can price cuts truly activate end-user demand? Historical experience suggests that during a destocking cycle, price cuts often lead to downstream wait-and-see behavior—the more prices fall, the less they buy.
Chain Reaction: From Weaving to Dyeing
The low sales ratio is not an isolated event. Texworld tracking has found that since mid-June, the operating rate of weaving mills in the Jiangsu-Zhejiang region has dropped from 78% to 72%, and the operating rate of dyeing and finishing plants has also declined synchronously. The contraction in orders from end apparel brands is transmitting step by step up the supply chain: brand order cuts → garment factory reductions → weaving mill shutdowns → chemical fiber plant inventory accumulation.
This transmission is particularly evident in major textile clusters such as Shengze, Changxing, and Xiuzhou. Some small and medium-sized weaving mills report that recent new order cycles have shortened significantly, mostly consisting of small-batch, multi-frequency replenishment orders, lacking sustained large orders. This means upstream chemical fiber plants will find it difficult to clear inventories completely through a single promotion, and sharp fluctuations in sales ratios will become a short-term norm.
Overcapacity: Structural Dilemma of the Chemical Fiber Industry
Looking at a longer perspective, the current price war is essentially an outbreak of overcapacity. Over the past three years, domestic polyester filament capacity has expanded continuously, with an annual growth rate of over 6%, while downstream demand growth has slowed to around 3%. The widening supply-demand gap means any demand fluctuation is amplified into an inventory crisis.
Industry concentration has not brought pricing power. Although the top ten companies account for over 65% of polyester filament capacity, when end-user demand is weak, leading enterprises also face shipment pressure, making price alliances difficult to maintain. The price cuts on June 24 are a microcosm of this dilemma—no one wants to be the first to cut prices, but everyone has to follow.