On June 24, the average sales rate of polyester filament yarn (PFY) sample enterprises stood at 45.6%, a sharp rebound of 11.4 percentage points from the previous trading day's closing data. This recovery was not a signal of natural demand improvement but the direct result of manufacturers' proactive price cuts. On that day, some factories reduced prices for standard-grade products, leading to a moderate improvement in spot transactions. The specific sales data among sample enterprises ranged widely—from a high of 150% to a low of 10%, indicating extreme divergence. Large enterprises leveraged capital and channel advantages to rapidly clear inventories amid the price-cutting wave, while small and medium-sized manufacturers faced a dilemma of whether to follow the cuts, causing their inventory pressures to accumulate.
This data reflects the core contradiction currently facing the chemical fiber industry: upstream capacity expansion is outpacing downstream demand growth, exacerbating the supply-demand mismatch. As a key intermediate in the polyester chain, PFY prices and sales trends directly influence costs and production schedules for weaving, dyeing, and even apparel end-users. When the sales rate falls below 50%, it typically signals passive inventory accumulation, putting significant strain on corporate cash flows.
The Double-Edged Sword of Price Reductions
Price cuts did stimulate some buying in the short term, but at the expense of profit margins. PFY production costs are primarily composed of PTA and MEG, both of which have also seen price declines recently. From the perspective of cost transmission along the chain, if crude oil prices remain low, the room for PTA and MEG to offer concessions will narrow further, and the floor for PFY price cuts will also move downward.
For weaving enterprises, the current loosening of raw material prices is a double-edged sword. On one hand, lower procurement costs help improve book profits. On the other, expectations of continued price declines discourage large-scale stockpiling. Most companies adopt a 'buy-as-needed' strategy, reducing order visibility for PFY factories to less than a week. This short-term procurement model, in turn, exacerbates inventory volatility and production scheduling difficulties for chemical fiber firms.
Judging from the extreme values in the sample data, the market is not uniformly pessimistic. The enterprise achieving a 150% sales rate is likely dealing in differentiated varieties such as cationic dyeable, high-elasticity, or micro-denier yarns. These products, due to higher technical barriers and lower substitutability, have maintained premium pricing even during the price-cutting wave. This indicates that the industry is accelerating its internal differentiation: commodity-grade products are mired in price wars, while technically advantaged segments still maintain relatively healthy sales cycles.
Chain Reactions Across Industrial Clusters and Regional Disparities
Major PFY production capacity is concentrated in industrial clusters such as Xiaoshan, Shaoxing, and Tongxiang in Zhejiang, as well as Wujiang and Shengze in Jiangsu. These regions are not only hubs for chemical fiber production but also centers for weaving and dyeing. Changes in sales rates quickly transmit to the downstream grey fabric market and dyeing capacity utilization.
Currently, the weaving machine operating rate in the Shengze area remains around 70%, but orders are predominantly small-to-medium batch and quick-response. After PFY price cuts, grey fabric prices have softened, but with a lag of about one week. For export-oriented weaving factories, overseas clients typically require longer price-lock periods, so the profit improvement from lower raw material costs is not immediately reflected in export quotes and may be offset by exchange rate fluctuations and rising sea freight costs.
Spot transaction data from the Keqiao Textile City also shows increased inquiries for conventional varieties like polyester taffeta and pongee, but actual transaction volumes account for less than 30% of inquiries. Buyers generally adopt a wait-and-see attitude, expecting further price declines. This 'buy on rising, not on falling' psychology is particularly pronounced in the textile raw material market, further prolonging the destocking cycle.
Dual Pressures from Foreign Trade Environment and Exchange Rate Risks
For PFY exporters, the challenge extends beyond weak domestic demand. Import demand from major overseas markets—Southeast Asia, South Asia, and the Middle East—slowed notably in the first half of 2026. Textile-exporting countries like Vietnam and Bangladesh are themselves experiencing a downturn in end-order demand, causing them to slow their raw material procurement pace.
Meanwhile, the RMB exchange rate against the USD experienced narrow fluctuations in June. While generally favorable for export pricing, overseas clients are highly price-sensitive. Once PFY prices drop, they often simultaneously demand longer payment terms or larger discounts, adding pressure on exporters' working capital.
It is also noteworthy that the EU is set to implement a new round of textile environmental regulations in Q3 2026, imposing stricter requirements on carbon footprint traceability and chemical restrictions for chemical fiber products. PFY manufacturers that have not completed relevant certifications in advance will face significantly higher compliance costs when exporting to Europe, potentially undermining their price competitiveness.