Behind the Sharp Drop in Polyester Filament Sales: The Chemical Fiber Market Undergoes Deep Inventory Correction

On June 24, the average sales-to-production ratio of polyester filament sample enterprises was only 45.6%, up 11.4 percentage points from the previous day's close, but still far below the industry-recognized healthy line of 70%. More notably, most companies' individual ratios clustered between 30% and 60%, with some as low as 10%. This means that even with price cuts by several factories, end-user purchasing willingness remains cautious, signaling that the chemical fiber market is undergoing a deep inventory correction driven by weak demand.

Low Sales-to-Production Ratio: Price Cuts Fail to Boost Demand

According to publicly available industry data, overall transactions in the polyester filament market improved modestly on June 24, but this improvement came at the cost of multiple factories lowering ex-factory prices. Looking at the distribution of sales-to-production ratios among sample enterprises, only a few exceeded 100%, while most struggled below 50%. Specifically, enterprises with ratios of 30% or lower accounted for more than one-third of the sample, reflecting that inventory digestion is significantly slower than production pace.

This phenomenon is not isolated. Since the start of the second quarter, operating rates in downstream weaving and dyeing sectors have continued to decline, and orders from end-use apparel brands have dropped markedly year-on-year. As an intermediate product, polyester filament's sales-to-production ratio directly mirrors the health of the textile supply chain. The current low ratio implies that even with factory price cuts, the impact cannot effectively transmit to final consumption, and inventory pressure is accumulating from downstream to upstream.

Industry Impact: High Inventory Forces Capacity Adjustment

The direct consequence of persistently low sales-to-production ratios is a rapid buildup of inventory. According to industry norms, when enterprise inventory days exceed 20, capital occupation and storage costs will significantly erode profits. Currently, some companies' actual inventory days have approached 30, forcing them to adopt more aggressive production cuts or maintenance schedules.

From a regional perspective, major polyester filament production areas such as Shengze, Changxing, and Xiaoshan have already seen some units operating at reduced loads. If end-user demand does not improve significantly in the third quarter, more enterprises may join the production cut wave. While such capacity adjustments may cause short-term supply contraction, they are a necessary cleanup process for the industry's healthy operation.

For buyers, the current low-price window may be limited. Once large-scale production cuts begin, supply tightening will push prices up. Therefore, it is not advisable to wait too long; instead, buyers should lock in low-priced supplies in batches based on their own order schedules.

Practical Recommendations

For Buyers - Monitor inventory days changes of major polyester filament factories. If inventory days decrease for two consecutive weeks, consider it a signal of price bottoming and gradually increase purchasing volumes. - Take advantage of the current period when factories have weak bargaining power to sign short-term price lock agreements with suppliers, avoiding cost fluctuations from subsequent price rebounds. - Diversify procurement sources, prioritizing enterprises with relatively higher sales-to-production ratios and lower inventory pressure to reduce supply disruption risks.

For Foreign Trade Companies - Closely track RMB exchange rate and crude oil price trends. Polyester filament costs are heavily influenced by PTA and MEG prices, and exchange rate fluctuations will further amplify export profit uncertainties. - Recommend including price adjustment clauses in export contracts to hedge against significant raw material price volatility. - Explore emerging markets in Southeast Asia and South Asia to reduce reliance on a single market and mitigate order decline risks caused by weak domestic demand.