On June 22, the average sales-to-production ratio of sampled polyester filament yarn makers stood at just 39.5%, up a mere 1.3 percentage points from the previous trading day. Behind this figure lies a clear picture of downstream buyers collectively slamming the brakes on procurement. When spot trading is broadly sluggish, the market signal is far more complex than a single percentage.
Dissecting the Data: Watching, Not Walking Away
A closer look at the individual data from 20 sample mills reveals a highly uneven distribution: the highest hit 120%, while several recorded zero. The majority clustered between 10% and 45%, forming a spindle-shaped pattern with thin tails on both ends. This distribution suggests that not all downstream customers have completely withdrawn—some essential demand is still being met through small-lot or negotiated purchases, but the appetite for bulk inventory buildup has evaporated.
More telling is the fact that two mills reported zero sales, accounting for 10% of the sample. In normal markets, a zero sales rate typically means the mill received virtually no firm orders that day—a phenomenon often seen during sharp price declines or extreme bearish sentiment. Given that the overall ratio improved by just 1.3 percentage points, it is fair to conclude that market sentiment has not fundamentally shifted; only a few low-priced cargoes attracted limited bargain hunting.
Cost and Inventory Double Squeeze
The weak sales ratio cannot be viewed in isolation. Upstream, PTA and MEG prices have fluctuated but not enough to trigger panic buying downstream. This indicates that the root cause of demand softness lies not in cost but in the lagged transmission of end-consumption weakness—fabric mills are sitting on high finished-goods inventories and naturally turning conservative on raw material procurement.
From an inventory perspective, a 39.5% sales ratio means more than 60% of daily output was added to stock. If this persists for several days, polyester plants will face mounting inventory pressure, forcing them to cut prices or reduce production to rebalance supply and demand. Indeed, some major mills have already adjusted their pricing strategies in late June, but the continued wait-and-see attitude among buyers suggests that price concessions alone are no longer sufficient to reignite demand.
Regional Divergence: From Caution to Fragmentation
Different weaving clusters have responded to the weak sales ratio in varied ways. In Shengze and Changxing, where water-jet looms dominate, operating rates remain at 60-70%, but raw material procurement cycles have shortened from the usual 7-10 days to just 3-5 days. In contrast, circular-knitting mills in Shaoxing and Xiaoshan, more exposed to sluggish export orders, show even weaker demand for polyester filament, with some plants actively reducing run rates.
This regional divergence essentially mirrors differences in end-market structures. Shengze's reliance on lining and luggage fabrics provides a cushion of steady demand, while Shaoxing's focus on apparel fabrics leaves it more vulnerable to destocking by brand owners. For suppliers, this means the same price list can yield vastly different transaction outcomes across regions.