On June 24, the average sales-to-production ratio of polyester filament sample enterprises rose by 11.4 percentage points from the previous trading day to 45.6%. This data appears positive at first glance, but a closer look reveals a less optimistic picture—the increase was achieved through price-cutting promotions by multiple factories.
Short-term Effects of Price Cuts
The day's sales data showed significant divergence: the highest reached 150%, while the lowest was only 10%. Specifically, a few enterprises performed well with rates of 80%, 150%, and 60%, but lower values such as 30% and 10% accounted for a larger share. This distribution indicates that price cuts did not lead to a broad market recovery, only stimulating some price-sensitive customers.
From an industry perspective, a sales-to-production ratio below 50% means companies are still passively accumulating inventory. The 45.6% level, despite the month-on-month improvement, remains far from the safety line. Typically, the ratio needs to consistently exceed 80% to alleviate inventory pressure. Current data suggests that downstream weaving mills are still purchasing raw materials based on rigid demand, lacking the willingness to actively replenish stocks.
Deeper Logic of Upstream-Downstream Transmission
Polyester filament is a core intermediate product in the chemical fiber industry chain, and its price trend directly correlates with upstream PTA and ethylene glycol, as well as downstream weaving and dyeing sectors. The current price-cutting promotion is essentially a move by upstream companies to sacrifice profits to secure cash flow amid weak demand.
For downstream weaving mills, price cuts mean lower procurement costs, but they also send a dangerous signal: upstream inventory is high, and prices may fall further. Therefore, most companies adopt a "buy on rising, not on falling" strategy, maintaining only minimal production material. This wait-and-see attitude is the fundamental reason why the sales-to-production ratio struggles to break through 50%.
From a regional industry belt perspective, factory operating rates in major polyester filament production areas such as Shengze, Changxing, and Xiaoshan have shown divergence. Some large factories maintain market share through price cuts, while small and medium enterprises have to reduce production under cost pressure. This structural adjustment will accelerate industry consolidation.
Industry Warning Behind the Data
The sales-to-production data on June 24 is just a microcosm of the prolonged downturn in the chemical fiber market. Looking back at late June, polyester filament prices continued to face pressure, with the sales-to-production ratio fluctuating mostly between 40% and 60%. This indicates that relying solely on price cuts cannot fundamentally solve the supply-demand imbalance.
The deeper issue lies in end demand. Slowing growth in textile and apparel exports, coupled with a less-than-expected recovery in domestic consumer markets, has led to insufficient orders for weaving mills. This contraction in demand is being transmitted layer by layer up the industry chain, ultimately reflected in the sales-to-production data of polyester filament.
For chemical fiber companies, the most urgent task now is not to continue cutting prices to grab orders, but to proactively reduce production to balance supply and demand. Historical experience shows that without significant improvement in demand, price wars only lead to losses across the entire industry.