The thermometer of the polyester filament yarn market pointed to freezing on July 1. The average sales-to-production ratio of sample enterprises was only 35.8%, down 3% from the previous day. This is not an isolated data point—among the 40 sample enterprises disclosed that day, more than half had ratios below 30%, with some even hitting 0%. The signal from the market is clear and sharp: downstream users are voting with their feet, collectively rejecting high-priced raw materials.
Background: The Market Logic Behind the Data
What does a 35.8% sales-to-production ratio mean? In a normal cycle for the chemical fiber industry, a ratio above 80% is considered healthy, while below 50% indicates a buyer-dominated wait-and-see market. The July 1 data is a textbook example of this mode. Although polyester filament yarn manufacturers adjusted their list prices that day, actual transactions remained stable without significant price concessions. Downstream weaving enterprises responded coolly, purchasing only on a need-to basis, resulting in a subdued trading atmosphere.
From the cost side, upstream PTA and ethylene glycol prices remain relatively high, influenced by volatile crude oil. The repeated tensions in the Middle East have left crude oil without upward momentum, but with a solid floor, putting polyester filament yarn producers in a dilemma: lowering prices squeezes profit margins, while holding prices risks inventory buildup. Downstream users, however, are not willing to pay for this impasse.
Industry Impact: Deeper Reasons for the Price Tug-of-War
The core contradiction in the current market is not simply a battle between 'expensive' and 'cheap,' but a fracture in the transmission of end-demand. Public data from the textile industry shows that since the second quarter of this year, the operating rate of weaving enterprises has been lower than the same period last year. Incremental orders for terminal apparel and home textiles are limited, especially for foreign trade orders, which have recovered slower than expected due to weak global consumption. Against this backdrop, downstream enterprises are generally adopting a 'produce-to-sell, purchase-on-demand' strategy, unwilling to bear additional raw material inventory risks.
Notably, this price tug-of-war is not unique to China. Concurrent reports indicate that extreme heat is crippling India's textile industry, which is expected to lose 34 million jobs by 2030. India is a major textile manufacturing base, and capacity damage there could indirectly affect the global supply-demand balance of cotton and chemical fibers, providing some support for domestic chemical fiber exports. However, it is unlikely to reverse the cautious sentiment downstream in the short term.
For upstream chemical fiber factories, the current challenge is not just sales pressure but also inventory management. If the sales-to-production ratio remains below 40%, enterprises will be forced to adjust supply through production cuts or maintenance; otherwise, capital tied up in inventory will quickly erode cash flow. In fact, some polyester plants have already signaled production cuts, which may provide a price floor in the next week or two.