On June 24, the average sales-to-production ratio of benchmark polyester filament enterprises stood at 45.6%, up 11.4 percentage points from the previous trading day. While this may appear as a rebound, a closer look reveals a more complex picture.
The Divergence Behind the Data
Among the 22 sampled plants, only two reported ratios above 100%—150% and 80%, respectively. The remaining 20 plants recorded ratios ranging from 10% to 70%, with 13 below 50% and seven as low as 30% or lower. This distribution—a few hot spots amid a cold market—indicates that the overall improvement was driven by aggressive price cuts from a handful of players, while most factories continued to accumulate inventory passively.
A key detail: price promotions did boost daily sales for some, lifting the average from the previous day's 34.2%. Yet 45.6% remains below the industry's seasonal warning line of 50%, which typically marks the threshold for normal restocking by downstream weaving mills. Below that level, buyers' willingness to replenish is significantly weaker than in normal years.
Why Price Cuts Are Losing Their Pull
The root cause of weak polyester filament sales lies not in pricing but in real demand contraction. Weaving mills are not debating "is it cheap enough?" but "do we need to buy at all?"
Since the second quarter, growth in garment export orders has slowed markedly, and domestic consumption remains subdued due to cautious consumer sentiment. Weaving mill operating rates have gradually declined from their April peak, and some small mills have opted to reduce output or take early holidays. Under these conditions, even if polyester plants offer discounts, downstream buyers have shifted from "buy on dips" to "buy as needed," significantly reducing order sizes.
This means that relying solely on price cuts to boost sales will yield diminishing returns. A single promotion may generate a one-day spike, but once it ends, ratios are likely to fall back below 30%, as seen in the prior week.
Inventory Pressure Moves Upstream
More concerning is how weak demand is transmitting inventory pressure upward along the chain.
Healthy inventory turnover for polyester plants typically ranges from 10 to 15 days. When average sales-to-production ratios stay below 50% for several consecutive days, daily output exceeding sales becomes unsold stock. At this pace, finished goods inventory can balloon to over 20 days within a week, approaching or exceeding industry warning levels.
High inventory creates two cascading effects: first, cash flow strain forces plants to offer further discounts, squeezing their own margins; second, if discounts fail to clear stock, plants must consider production cuts or scheduled maintenance to align supply with shrinking demand. Indeed, some polyester plants have already begun planning maintenance shutdowns in late June, but whether the scale will be sufficient remains uncertain.
Different Pressures for Different Scales
Large and small polyester plants face fundamentally different challenges in this downturn.
Large plants typically have broader product lines and more stable direct-supply relationships, allowing them to adjust product mix (e.g., shifting from POY to FDY or DTY) to maintain sales. They also have stronger balance sheets to absorb inventory costs without resorting to aggressive price cuts.
Small and medium-sized plants, by contrast, are more vulnerable. Their product portfolios are narrower, and their customer base—mostly small weaving mills and traders—is precisely the segment that is cutting purchases most aggressively. As terminal orders dry up, small weavers prioritize reducing orders from small polyester plants, driving their sales ratios below the 30% survival line.