On June 24, the polyester filament yarn (PFY) market delivered a sobering signal: the average sales-to-production ratio among sample enterprises stood at just 45.6%. Although this marked an 11.4 percentage point increase from the previous trading day's close, it remains far below the industry's equilibrium line of 80%. This means more than half of the day's output went unsold, swelling inventory levels.
Price Cuts Yield Limited Results
Faced with persistently weak sales, several PFY factories initiated price reduction campaigns on June 24. Market feedback indicates that spot trading did see a 'moderate improvement'—with individual sample enterprise ratios ranging from 30% to 150%. However, the distribution was starkly uneven: a few mills achieved 150% sales, while the majority languished between 30% and 60%. This 'ice and fire' scenario suggests that price cuts failed to trigger a broad-based buying spree, as downstream weaving mills remained highly cautious.
For buyers, this implies continued downward pressure on PFY prices in the near term. Mills eager to destock may offer further concessions. Yet, this 'volume-for-price' strategy is unsustainable—once upstream costs for PTA or MEG rebound, profit margins will be squeezed, potentially leading to sharp price volatility.
Root Cause: Anemic Demand
The low sales ratio stems not from supply-side issues but from flagging demand. Insufficient orders in downstream weaving and dyeing sectors are the core bottleneck in the industry chain. From a macro perspective, the anticipated 'revenge spending' in end-use apparel markets has failed to materialize. Instead, destocking cycles in Europe and the U.S. persist, while order diversion to Southeast Asia continues to intensify.
Against this backdrop, weaving mills are reluctant to build up inventories. They prefer just-in-time purchasing, keeping raw material stocks at minimal levels. This directly suppresses PFY mills' sales ratios—even price cuts cannot stimulate large-scale demand beyond immediate needs. Industry data shows that in June, sample PFY enterprises' sales ratios have repeatedly dropped below 50%, eroding market confidence.
Ripple Effects Across the Industry Belt
PFY factories in key production hubs like Zhejiang and Jiangsu are bearing the brunt. Inventory pressure is forcing these mills to adjust operating rates. Some small- and medium-sized plants have already reduced output or initiated maintenance shutdowns to ease cash flow strains. This, in turn, pressures upstream PTA and MEG suppliers, as lower demand weakens price support.
Meanwhile, downstream weaving clusters in Shengze and Keqiao are also seeing declining loom utilization rates. Weaving mills report shorter order cycles and a scarcity of large orders, leaving them to rely on sporadic small batches. The entire chain is trapped in a negative loop: low demand → low sales ratios → price cuts → wait-and-see attitude.