The price competition in the polyester filament yarn (POY) market is entering an intense phase. According to industry data released on June 24, the average sales-to-production ratio among sample enterprises stood at only 45.6%, up 11.4 percentage points from the previous trading day's closing data. Yet this figure remains far below the healthy industry benchmark of 80%, which is typically required to maintain stable inventory levels. This means more than half of current production capacity is still being converted into inventory rather than actual orders.
Limited Impact of Price Cuts
Some POY factories have resorted to price reductions to generate liquidity. The distribution of sales-to-production ratios on that day reveals extreme divergence among enterprises: the highest reached 150%, while the lowest was just 10%. This polarization indicates that price-cutting strategies are not universally effective; only factories with cost advantages or product differentiation can truly stimulate shipments. For most small and medium-sized enterprises, following price cuts only further compresses already thin processing margins.
From an industrial chain perspective, upstream PTA and MEG prices have remained range-bound recently, providing weak cost support. Downstream fabric mills are operating at around 60% capacity, maintaining just-in-time raw material procurement without any inventory buildup intentions. The temporary rebound in the sales-to-production ratio is more of a one-time restocking response to price cuts, rather than a signal of genuine recovery in end demand.
Inventory Pressure Transmits Throughout the Chain
High POY inventories are not an isolated phenomenon. Related products such as polyester chips and polyester staple fiber are also facing inventory pressure. Industry data shows that as of mid-June, inventory days at major polyester factories in the Jiangsu-Zhejiang region generally ranged from 15 to 20 days, far exceeding the normal level of 7 to 10 days. The cash flow strain from high inventories is forcing some factories to reduce production or schedule maintenance shutdowns to adjust supply.
For textile fabric buyers, the current easing of raw material prices may open a short-term purchasing window. However, caution is warranted: if terminal apparel orders do not improve significantly, raw material prices could decline further. It is recommended that buyers build positions in batches based on actual order schedules to avoid locking in large volumes of high-priced inventory at once.
Industrial Cluster Reactions and Future Expectations
As the main production areas for domestic POY, industrial clusters in Xiaoshan, Tongxiang, Shaoxing in Zhejiang Province, and Wujiang in Jiangsu Province are most sensitive to market changes. Recent field visits indicate that some large enterprises have begun to proactively reduce operating rates from full capacity to around 80% to cope with weak demand. In contrast, small and medium-sized factories are more inclined to adopt flexible pricing strategies, attempting to compete for limited orders during the off-season.
Looking ahead to the third quarter, the traditional textile peak season of "Golden September and Silver October" remains the biggest market variable. If domestic and foreign trade orders are released intensively, the current accumulated inventories could be quickly digested; otherwise, the industry may face a longer destocking cycle. POY prices are expected to fluctuate near cost levels, waiting for directional signals from the demand side.