On June 25, the chemical fiber market hit a freezing point in trading sentiment. The average sales-to-production ratio of polyester filament yarn sample enterprises stood at only 29.5%, down 16.1 percentage points from the previous trading day. This means over 70% of the day's production failed to convert into actual sales, rapidly shifting inventory pressure back to polyester factories.
Dual Squeeze of Costs and Demand
The sharp drop in the sales-to-production ratio was directly triggered by continued weakness on the cost side. Falling raw material prices shattered the market's previous bullish expectations, prompting downstream weaving enterprises to adopt a 'buy on rising, avoid on falling' strategy, sharply slowing their procurement pace. Looking at specific sample enterprise data, the day's sales-to-production ratios were highly dispersed: the highest reached 70%, while the lowest was 0%, showing clear divergence. Most enterprises had ratios between 20% and 40%, reflecting a pessimistic outlook among small and medium-sized weaving mills, which maintained only essential purchases.
This uneven situation is not an isolated event. The transmission mechanism across the chemical fiber supply chain is undergoing a severe test: price declines in upstream raw materials like PTA and MEG have not freed up profit margins for the polyester segment but have instead intensified market wait-and-see sentiment. For polyester filament yarn factories, a sales-to-production ratio below 30% means a sharp increase in cash flow pressure, and some may be forced to cut prices to destock before month-end.
Chain Reactions in Industrial Clusters
As major consumption areas for polyester filament yarn, weaving clusters in Zhejiang and Jiangsu provinces are already feeling the chill. In places like Shengze, Changxing, and Xiaoshan, the operating rate of water-jet looms saw a slight decline in late June, while grey fabric inventory days increased. Speculative hoarding demand from traders has almost disappeared, and the market has returned to being driven by real orders. This directly challenges the production scheduling of upstream polyester factories—if the sales-to-production ratio remains low, production cuts and maintenance shutdowns will become a high-probability option.
It is worth noting that the current low sales-to-production data does not represent a collapse of the entire industry but rather a structural adjustment. Sales of some differentiated products (such as cationic polyester filament yarn and high-elastic yarn) remained relatively stable, but conventional specifications like POY, FDY, and DTY face severe homogeneous competition. This indicates that amid weak macro demand, the added value of products is becoming a key differentiator for enterprises to withstand risks.
Three Key Variables for the Outlook
To determine when the chemical fiber market will bottom out, three signals must be closely watched:
- First, whether raw material prices can stabilize. PTA and ethylene glycol prices serve as the cost anchor for polyester filament yarn. If crude oil prices do not fall further, polyester cost support will gradually emerge.
- Second, the recovery pace of end-user orders. Currently, the textile industry is in its traditional off-season, and large-scale orders for autumn and winter fabrics have not yet started. The stocking period for the 'Golden September and Silver October' season from late August to September will be a critical window to see if demand can rebound.
- Third, the adjustment of operating rates at polyester factories. If the industry intensifies coordinated production cuts, the supply-demand balance could improve in the short term, but this also means survival pressure on small and medium factories will increase further.