39.5% — that was the average sales-to-output ratio for sample polyester filament yarn enterprises on June 22. This figure means that for every 100 tons of polyester filament yarn produced that day, less than 40 tons were absorbed by the market. Although this data point rose by 1.3 percentage points from the previous trading day's close, its absolute value remains at a low level for the year, reflecting the continued weakness in downstream demand for chemical fibers.
Signals Behind the Data
Publicly available industry data shows that on June 22, the sales-to-output ratios among sample enterprises were highly uneven: the highest reached 120%, while the lowest was 0%. Among the 19 surveyed companies, six had ratios below 20%, and two recorded zero sales. This polarized pattern indicates that the market is not experiencing a uniform contraction, but rather an intensification of structural divergence.
The prolonged low sales-to-output ratio directly reflects insufficient orders from end-use sectors such as apparel and home textiles. Upstream polyester plants continue to operate at high capacity utilization rates, while downstream weaving mills generally adopt a 'buy-as-needed' strategy, reluctant to build up inventory. This game between upstream and downstream is continuously transferring pressure to chemical fiber producers.
Root Causes of Supply-Demand Imbalance
The current sales dilemma stems from a mismatch in the pace of supply and demand. On the supply side, chemical fiber capacity has expanded rapidly over the past few years, with a concentrated release of new polyester filament yarn capacity pushing market supply to historical highs. On the demand side, the growth rate of global textile and apparel trade has slowed, and under the trend of domestic consumption upgrading, demand for low-end fabrics has been squeezed, while mid-to-high-end products face technical barriers.
Another factor that cannot be ignored is volatility on the cost side. Uncertainty in crude oil prices directly transmits to PTA and MEG, thereby affecting the cost support for polyester filament yarn. When raw material prices fluctuate frequently, downstream weaving mills tend to postpone purchases, waiting for clearer price signals. Once this wait-and-see sentiment becomes ingrained, it further depresses the sales-to-output ratio.
Chain Reaction in Industrial Clusters
As the country's largest chemical fiber industrial cluster, enterprises in the Jiangsu-Zhejiang region (especially Shaoxing, Xiaoshan, Tongxiang, and Wujiang) are bearing the brunt. Rising inventory pressure has forced some factories to resort to price cuts or production reductions to protect prices, but downstream buyers are not responding. Weaving mills in Shengze and Keqiao have already seen slight declines in operating rates, and their gray fabric inventories are also at high levels.
If this negative feedback loop continues, it could trigger a new round of industry consolidation. Small and medium-sized chemical fiber enterprises will face pressure on their capital chains, while leading companies, leveraging their scale advantages and cost control capabilities, are expected to further expand their market share during the adjustment period. For foreign trade enterprises, the short-term and uncertain nature of overseas orders makes them even less willing to stock up, and export quotations face greater room for compression.
Practical Recommendations
For Buyers - Short-term strategy: Adopt a batch procurement and small-order, quick-response model to avoid inventory losses caused by raw material price fluctuations. Monitor promotional nodes of mainstream factories and seize phased low-price windows. - Long-term strategy: Establish strategic partnerships with 2-3 reputable suppliers and lock in partial long-term contracts to hedge against market volatility risks. Simultaneously, strengthen research on end-consumer trends and adjust the procurement category structure in advance.
For Producers - Optimize production scheduling: Dynamically adjust operating rates based on the sales-to-output ratio to avoid blind full production leading to inventory backlog. For specifications with ratios persistently below 20%, consider reducing or switching production. - Strengthen services: Proactively offer downstream clients inventory management advice and price warning services to enhance customer stickiness. Open up new growth points through differentiated products (e.g., functional, eco-friendly polyester filament yarn).
Overall, the low sales-to-output ratio for polyester filament yarn is unlikely to reverse fundamentally in the short term. The true turning point for the market may not arrive until downstream inventories are digested and end-user orders show a substantive recovery. Until then, all links in the industrial chain need to prepare for a prolonged period of adjustment.