On July 2, the chemical fiber market received a troubling set of data: the average sales-to-production ratio of polyester filament yarn sample enterprises stood at only 31.7%, down 4.1 percentage points from the previous trading day. Despite the industry's cash flow remaining high, downstream users' resistance has intensified rather than eased, leading to a cold trading atmosphere and scarce actual transactions.
Background
China Customs data shows that the polyester filament yarn sector has recently enjoyed widening cash flow, but this 'high-profit' signal has not translated into positive demand feedback. The sales data released on that day revealed a highly dispersed distribution: the highest ratio reached 70%, the lowest was 0%, with a median of about 20%, and most enterprises falling in the 15%-30% range. This indicates that even with some easing of upstream cost pressure, downstream weaving and dyeing sectors remain extremely reluctant to purchase.
Public industry data further reveals that this low sales ratio is not a short-term fluctuation. Since late June, the polyester filament yarn market has maintained sales ratios below 40% for consecutive days, with inventory pressure now transmitting upstream to polyester chips and PTA. National Bureau of Statistics data also shows a clear slowdown in the growth rate of export orders for terminal apparel and home textiles, directly weakening support for chemical fiber raw material procurement.
Industry Impact
From the perspective of the upstream-downstream transmission chain, the current chemical fiber market is experiencing a typical 'cost-demand' double squeeze. On one hand, international crude oil prices, affected by repeated Middle East tensions, have lost upward momentum, weakening cost support for raw materials like PX and PTA. On the other hand, terminal consumer demand, especially from European and American export orders, has recovered slower than expected, prompting downstream weaving enterprises to maintain low inventories rather than chase high prices.
The impact of this price tug-of-war on various links of the industrial chain is already apparent:
- Upstream PTA plants maintain high operating rates, but inventory accumulation is accelerating, with some enterprises beginning to lower quotations to stimulate sales.
- Midstream polyester chip and filament yarn enterprises face a dilemma: if they proactively cut prices, they will erode cash flow; if they insist on maintaining prices, sales ratios will decline further.
- Downstream weaving and dyeing enterprises are taking advantage of this bargaining window, adopting a 'buy-as-needed' cautious strategy to further reduce raw material inventory days.
Notably, extreme weather factors are amplifying market uncertainty. The extreme heat in India in 2023 is projected to reduce the country's textile industry workforce by 34 million jobs by 2030, and the long-term trend of global textile capacity relocation and supply chain restructuring is changing the geographic distribution of chemical fiber demand. As the world's largest chemical fiber producer, China must be alert to the potential impact of these structural changes on export markets.