On July 2, the trading atmosphere in the polyester filament market hit a freezing point. The average sales-to-production ratio of sample enterprises was only 31.7%, down 4.1 percentage points from the previous trading day. With cash flow remaining at historically high levels, downstream user resistance has evolved from local wait-and-see to a systemic contraction.
Behind this data lies an intensifying price game between the upstream and downstream of the chemical fiber industry. Upstream raw material costs remain high, and polyester plants are reluctant to cut profits. Downstream weaving enterprises, facing weak terminal orders and inventory backlog, have adopted a 'zero replenishment' strategy for high-priced raw materials. The tug-of-war between the two is pushing the market into a stalemate of weak supply and demand.
Supply-demand imbalance reflected in sales ratio
According to publicly available industry data, the sales-to-production ratios of 25 sample enterprises on that day were highly dispersed: the highest was 70%, while the lowest was 0%. Most enterprises fell in the 15%-35% range, with only a few reaching above 50%. This 'long-tail' distribution indicates that the polyester filament market has evolved from structural differentiation to widespread downturn.
The sales-to-production ratio is a key indicator of short-term sales pressure for chemical fiber enterprises. A 31.7% average means more than two-thirds of products failed to convert into actual sales, directly turning into inventory. For continuous-production polyester plants, inventory accumulation not only ties up capital but also forces subsequent production cuts or price reductions, creating a negative cycle.
Notably, the coexistence of high cash flow and low sales ratio forms the most dangerous combination in the current market. High cash flow should reflect strong profitability, but without sales, it remains only a paper figure, unable to alleviate liquidity pressure.
Breakdown of cost transmission mechanism
The high cash flow in polyester filament is mainly due to the firm support from upstream PTA and ethylene glycol prices on the cost side. However, this cost-driven price increase has not been smoothly transmitted downstream. Weaving enterprises face a year-on-year decline in order volumes from terminal apparel brands, leaving them with no capacity to absorb higher raw material costs.
From the perspective of industrial chain transmission, when upstream raw material price increases exceed the downstream tolerance threshold, the market automatically triggers a 'demand suppression' mechanism. Current polyester filament prices are approaching the psychological ceiling for weaving enterprises. Buyers prefer to halt operations and wait rather than risk inventory depreciation. This adverse selection of 'the higher the price, the less the buying' has decoupled raw material prices from demand.
Another hidden factor is crude oil market volatility. Recent fluctuations in the Middle East situation have weakened the upward momentum of crude oil prices. As the source of the chemical fiber chain, if crude oil loses direction, it will undermine the cost support expectations for the polyester segment, further intensifying market wait-and-see sentiment.
Industrial cluster and regional responses
From a regional perspective, weaving enterprises in major polyester filament consumption areas such as Xiaoshan and Shaoxing in Zhejiang, and Shengze in Jiangsu, have seen varying degrees of production rate cuts. Small and medium-sized weaving mills in these areas, lacking bargaining power and inventory buffers, are most sensitive to high-priced raw materials. Some factories have proactively reduced operating rates, shifting to a 'make-to-order' production model to avoid active stockpiling.
This regional capacity contraction is feeding back upstream. While polyester plants have not yet implemented large-scale production cuts, some have begun to offer hidden concessions through 'promotional discounts' or 'acceptance bill settlement' to ease sales pressure. However, these tentative moves have not yet triggered a concentrated restocking by downstream buyers.