On June 25, the average sales-to-production ratio of polyester filament yarn sample enterprises plummeted to 29.5%, down 16.1 percentage points from the previous day. This means that for every 100 tons of polyester filament yarn produced, less than 30 tons were picked up by downstream buyers, with the rest turning into inventory. The market transaction was exceptionally quiet, rare in recent times.
Signals Behind the Data
A sales-to-production ratio below 30% is not an isolated event. Among the 18 sample enterprises that day, at least two reported zero sales, and more than half had ratios of 20% or below, with the highest only 70%. This widespread weakness cannot be explained by local demand fluctuations alone.
Industry public data shows that the decline in raw material costs is the primary factor suppressing trading sentiment. When feedstock prices keep falling, downstream weaving mills typically adopt a 'buy on rising, not falling' strategy, delaying purchases to wait for lower prices. However, the deeper issue is that cost reductions have failed to stimulate demand, revealing a broken transmission mechanism in the industrial chain—the benefits of lower upstream prices have not translated into incremental downstream orders.
Why the Chain Transmission Stalls
The immediate upstream of polyester filament yarn is PTA and MEG, both of which have been in a downward price channel recently. Logically, lower raw material costs should enable polyester filament yarn producers to offer discounts and drive downstream weaving mills to replenish inventory. But the reality is that weaving mills themselves are facing an order shortage.
According to public data from the National Bureau of Statistics, the year-on-year growth rate of industrial added value of textile enterprises above designated size has narrowed for three consecutive months as of May 2024. Weak terminal apparel consumption and cautious ordering by brands have kept weaving mill operating rates at around 70%. In this context, weaving mills are not only unwilling to stock up but are actively reducing raw material inventory to lower capital occupation. The low sales-to-production ratio of polyester filament yarn essentially confirms the lagged impact of weak end demand.
Inventory Pressure Moves Upstream
The direct consequence of a low sales-to-production ratio is rapid inventory accumulation at polyester filament yarn producers. According to industry public data, since mid-June, inventory days for the three main varieties—POY, FDY, and DTY—have all risen significantly, with some specifications exceeding the 20-day warning line. Inventory pressure has forced some producers to implement production cuts or maintenance, but the effect remains to be seen.
More concerning is that this pressure is transmitting upstream to the PTA sector. Reduced polyester filament yarn output means lower demand for PTA, and the PTA industry itself is already grappling with overcapacity. If PTA prices accelerate their decline due to shrinking demand, the entire chemical fiber chain's pricing system may face restructuring.
Impact on Buyers and Foreign Trade
For fabric and garment buyers, current polyester filament yarn prices are at a cyclical low, but this is not an ideal time to bottom-fish. Cost declines have not stopped, and downstream demand shows no improvement, leaving room for further price drops. It is recommended that buyers place orders according to actual needs and avoid excessive stockpiling driven by price temptation.
For foreign trade enterprises, polyester filament yarn price fluctuations directly affect export quotations. The current global textile market shows clear demand divergence—orders from Southeast Asia are recovering, but European and American markets remain weak. When signing forward contracts, foreign trade firms should include price adjustment clauses to hedge against raw material price volatility risks.