On June 25, the trading atmosphere in the polyester filament yarn market hit a freezing point. According to publicly available industry data, the average sales-to-production ratio of sample enterprises was only 29.5%, a sharp drop of 16.1 percentage points from the previous trading day. This figure means that nearly 70% of the day's production failed to translate into actual sales, with inventories visibly piling up.
Market Signals Behind the Sales Data
A closer look at the distribution among the 18 sample enterprises reveals significant divergence. Only two companies achieved a sales-to-production ratio exceeding 50%, at 70% and 60% respectively. Meanwhile, eight enterprises recorded ratios below 20%, with two reporting zero sales. This polarized pattern indicates that the market is not uniformly weak but rather highly fragmented—a few companies maintain some sales volume through price or channel advantages, while the majority are stuck in a sales stalemate.
More alarmingly, the 29.5% ratio is not an isolated event. Since mid-June, the sales-to-production ratio has lingered at low levels, including a similarly weak reading on June 16. This sustained downturn cannot be dismissed as short-term volatility; it reflects a systemic contraction in downstream weaving mills' willingness to purchase.
How Cost Declines Suppress Trading Sentiment
The immediate trigger for the plunge in sales ratio is the persistent decline in upstream costs. Recent sharp drops in raw material prices have fostered a "buy on rising, not falling" mentality in the polyester filament yarn market. When cost expectations are downward, downstream weaving mills tend to delay purchases and consume existing inventory, waiting for lower price points. Once this wait-and-see sentiment spreads, it creates a negative cycle: falling prices → delayed purchases → rising inventory → forced price cuts.
From the industrial transmission chain, price weakness in PTA and MEG has already passed to the polyester chip segment. Polyester filament yarn, as an intermediate product, is squeezed from both sides: cost collapse from upstream and order contraction from downstream. This two-sided pressure leaves chemical fiber companies in a pricing dilemma. Cutting prices may stimulate short-term shipments but would further entrench downstream waiting psychology. Holding prices, on the other hand, risks inventory overflow.
Real Responses from Regional Industrial Belts
Feedback from major polyester filament yarn consumption areas—such as Xiaoshan and Shaoxing in Zhejiang, and Wujiang in Jiangsu—offers more convincing evidence. Industry surveys indicate that while loom operating rates in these weaving clusters have not dropped sharply recently, raw material purchasing has slowed markedly. Companies are generally adopting a "buy-as-you-use, small-batch and multiple-frequency" procurement strategy, with proactive inventory building falling to a year-to-date low.
Behind this behavior lies downstream weavers' doubts about the sustainability of end-use garment orders. Although the domestic market saw a modest recovery after the June 18 e-commerce festival, export orders remain constrained by high overseas inventories and destocking cycles. Finished goods inventories at weaving mills are also elevated, prompting them to reduce raw material stocks to lower capital occupation.
Practical Recommendations for Buyers and Foreign Trade Companies
For Buyers - Maintain short-term caution but avoid over-depleting inventory: Prices are in a downtrend, but further downside is limited. It is advisable to keep 1-2 weeks of safety stock to avoid being forced to chase prices during sudden replenishment needs. - Monitor PTA plant maintenance schedules: If concentrated maintenance occurs upstream, costs may stabilize temporarily, providing an opportunity to increase procurement volumes at relatively low levels. - Leverage market divergence to choose partners: Prioritize suppliers with relatively stable sales ratios and healthy cash flow. Avoid signing long-term fixed-price contracts with companies under severe inventory pressure.
For Foreign Trade Companies - Build exchange rate and freight flexibility into export quotations: Given current RMB exchange rate volatility and persistently high ocean freight rates, include price adjustment clauses in forward contracts. - Track capacity shifts in Southeast Asian weaving: Some orders are moving to Vietnam, Bangladesh, and other countries, affecting the export flow of Chinese polyester filament yarn. Adjust target market strategies accordingly. - Use futures instruments to hedge risks: If price-locking is needed, consider hedging with PTA or polyester staple fiber futures to mitigate the erosion of export order profits caused by raw material price fluctuations.
The sharp drop in polyester filament yarn sales ratio is essentially a microcosm of the chemical fiber industry's cyclical adjustment. Under the dual pressure of falling costs and weak demand, the market is shifting from a "seller's market" to a "buyer's market." For all links in the industrial chain, the core task now is not maximizing profits but managing inventory and cash flow to weather this painful destocking period.