On June 24, 2026, the trading data for polyester filament yarn (PFY) in China sent a clear signal: downstream weaving mills are collectively hitting the brakes. The average sales-to-production ratio among sample enterprises stood at only 45.6%. Although this marked an 11.4-percentage-point increase from the previous trading day, it remains far below the industry's healthy operating threshold (typically considered above 70%). This means that for every 100 tons of PFY produced that day, fewer than 46 tons were absorbed by the market, with the remainder accumulating in factory warehouses at an alarming rate.
Price cuts fail to reverse the downturn
Faced with persistently weak sales-to-production ratios, some PFY factories opted for the most direct response: price reductions. Several mills launched promotional campaigns intraday, hoping to trade price for volume. The specific sales data revealed stark divergence: a handful of enterprises achieved ratios as high as 150%, suggesting their price cuts or specific product specifications resonated with downstream buyers. However, the majority of mills recorded ratios between 10% and 40%, with the lowest at a mere 10%. This 'fire and ice' scenario indicates that the current market weakness is not a broad-based demand collapse but a structural imbalance—oversupply in standard specifications versus relatively stronger pricing power for differentiated, functional products.
For buyers, price promotions may appear as bargain opportunities, but they conceal deeper risks. Once the downward price channel for PFY opens, downstream weaving mills that stockpile heavily could face inventory devaluation losses amid a 'buy on rising, not falling' market psychology. Industry data shows that since mid-June, prices of major PFY grades have already dropped 3% to 5%, with no signs of stabilization yet.
Inventory pressure cascades upstream
The direct consequence of low sales-to-production ratios is rising inventory. Industry convention dictates that when the ratio stays below 60% for three consecutive trading days, mills typically respond by cutting output or scheduling maintenance to rebalance supply and demand. But the current situation is more complex: upstream PTA (purified terephthalic acid) and MEG (monoethylene glycol) prices are also in a weak range, offering insufficient cost-side support. This leaves PFY mills trapped between 'cutting output to defend prices' and 'cutting prices to clear inventory'.
From a chain transmission perspective, PFY—as an intermediate product—quickly transmits price volatility to upstream polyester chips and downstream grey fabrics. The June 24 data implies that over the next one to two weeks, weaving mills will likely continue to compress raw material purchases, forcing polyester plants to lower operating rates. For an industry that relies on economies of scale, this will directly dilute fixed costs per unit, further squeezing profit margins.
Ripple effects in regional industrial clusters
Looking at core industrial clusters, inventory pressure is more acute in major PFY-producing regions such as Shengze, Changxing, and Xiaoshan. According to industry surveys, some small and medium-sized mills are approaching full warehouse capacity, with cash flow turnover slowing markedly. Meanwhile, downstream grey fabric market operating rates have also softened—the comprehensive operating rate of water-jet looms in Jiangsu and Zhejiang has slipped from 78% at the end of May to around 72% currently. Weak foreign apparel orders are the primary culprit, but the inventory logjam in intermediate links is exacerbating the trend.
Notably, the domestic market has not provided sufficient buffer. Terminal consumer sectors such as home textiles and apparel have entered a traditional off-season following the June 18 e-commerce shopping festival, with brands and channels preferring to digest existing inventory rather than place new orders. This suggests that the PFY market's 'inventory clearance' battle may be more protracted than initially expected.