On June 25, the domestic polyester filament yarn market saw a sharp downturn in transactions. Industry data shows that 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 indicates that nearly 70% of production capacity failed to convert into actual orders, with downstream weaving companies' purchasing intentions hitting a freezing point.
Resonance of Cost Collapse and Weak Demand
The direct trigger for the plunge in the sales-to-production ratio is the continued decline in upstream raw material costs. Recently, prices of PTA, ethylene glycol, and other polyester raw materials have seen notable corrections. The loosening of costs quickly transmitted downstream, but the transmission was not in the form of price reductions but rather a freeze in transaction volume. The Texcircle editorial team observed that when raw material prices are in a downward channel, downstream weaving companies instinctively delay purchases, waiting for lower prices. This 'buy on rising, not on falling' psychology was extremely reflected in the data on June 25: several sample enterprises recorded 0% sales-to-production ratios, and more than half had ratios below 20%.
From an industrial chain perspective, this transmission failure is not accidental. Polyester filament yarn sits in the middle of the long chain 'crude oil-PX-PTA-polyester.' Fluctuations in upstream costs must undergo multiple processing stages to reach the end-user. When costs fall too quickly, profit margins in the intermediate links are rapidly compressed, while downstream weaving companies use information asymmetry to optimize their procurement pace. The result of this game is the passive accumulation of inventory at polyester plants, while end-demand has not been truly released.
Dual Pressure of Inventory and Profit Squeeze
A sales-to-production ratio below 30% means that the inventory turnover days of polyester plants are rapidly lengthening. Industry data indicates that current social inventory of polyester filament yarn is at a high level for the year. The continuous accumulation of inventory not only ties up significant capital but also increases warehousing and financial costs. More critically, when inventory pressure rises, factories are often forced to reduce prices to destock, which further strengthens downstream wait-and-see expectations, creating a vicious cycle.
From the profit side, the decline in raw material costs has not brought excess profits to polyester plants. Due to increased downstream price pressure, the decline in polyester filament yarn prices often exceeds the decline in raw material prices, leading to a continuous narrowing of processing spreads. Some small and medium-sized factories are already facing losses. This pattern of 'costs down, profits down' often signals an acceleration of industry consolidation in history.
Chain Reaction in Regional Industrial Clusters
The low sales-to-production ratio of polyester filament yarn is transmitting to textile industrial clusters. Weaving clusters represented by Shengze, Changxing, and Xiaoshan have seen a decline in operating rates. These regions concentrate a large number of water-jet looms and warp knitting machines, with huge demand for polyester filament yarn. When upstream factories have poor sales, downstream weaving companies respond by reducing production or shutting down machines to cope with raw material price uncertainty. Industry data shows that the comprehensive operating rate of weaving in the Jiangsu-Zhejiang region has recently dropped by about 5 percentage points from the beginning of the month.
This synchronized contraction of upstream and downstream is difficult to alleviate in the short term. June is usually a slack season for textiles, with a lack of highlights in the domestic market and foreign trade orders facing pressures from high overseas inflation and destocking. The sales-to-production ratio data for polyester filament yarn is essentially a barometer of the entire textile industry chain's prosperity. Behind the 29.5% figure lies a true reflection of weak consumption in terminal apparel and home textiles.
Q3 Outlook and Operational Suggestions
Despite the current pessimistic market sentiment, there are opportunities for a turnaround. The third quarter is typically the start of the stocking season for autumn and winter fabrics. If end-demand recovers as expected, current low-priced inventory could become an opportunity for downstream companies to replenish. Additionally, fluctuations in crude oil prices remain the biggest variable—if international oil prices stabilize and rebound, the cost support for polyester filament yarn will be re-established, and the sales-to-production ratio may return to normal levels.