33.0%—that was the average sales rate of polyester filament yarn among sample enterprises on July 3. Even though it edged up 1.3 percentage points from the previous trading day, this figure remains firmly in what the industry considers a weak zone. More notably, among the 25 companies surveyed, only one achieved a sales rate above 100%, with the majority hovering between 20% and 40%, and some even recording zero sales.
Market Signals Behind the Sales Data
The sales rate is a core indicator of activity in the chemical fiber market. On July 3, the data showed an extremely uneven distribution: the lowest was 0%, the highest 200%, but the median was just 30%. This extreme divergence reveals a reality: some companies successfully attracted orders through price cuts, while most others struggled with rising inventories.
From the perspective of supply chain transmission, the low sales rate of polyester filament yarn directly reflects weak purchasing willingness among downstream weaving mills. Currently in the traditional off-season for textiles, final garment orders have yet to pick up, prompting weaving mills to adopt a 'buy-as-needed' strategy to avoid bulk stocking. This cautious sentiment cascades upstream, putting chemical fiber producers under dual pressure from inventory accumulation and capital turnover.
Divergent Manufacturer Sentiments and Price Negotiations
Behind the weak sales data lies a deep divergence in manufacturer expectations for the market outlook. Some companies chose to lower prices to stimulate sales, a strategy clearly reflected in the case of the firm achieving a 200% sales rate—low prices did generate short-term orders. However, most companies opted to wait or make minor adjustments, unwilling to offer significant concessions while upstream costs remain relatively rigid.
This divergence is essentially a prisoner's dilemma: if all producers cut output and support prices, the market could maintain a relative balance. But individual price cuts quickly break the tacit agreement, triggering a chain reaction. The data from July 3 suggests that price-cutting strategies have not been broadly effective—the overall sales rate rose only 1.3 percentage points, indicating limited downstream demand elasticity. Pure price concessions are unlikely to reverse the downturn.
Dual Squeeze from Costs and Demand
The current predicament of the chemical fiber industry stems from a dual squeeze on costs and demand. Upstream crude oil prices, influenced by ongoing volatility in the Middle East, are fluctuating but lack sustained upward momentum, leaving raw material costs without a clear direction. Meanwhile, downstream textile and garment exports face headwinds from slowing global demand, and the domestic market is also showing weak growth.
From a broader perspective, the industry is caught in a cycle of overcapacity and shrinking demand. In recent years, polyester filament yarn capacity has expanded continuously, while end-consumption growth has slowed markedly, widening the supply-demand gap. This structural imbalance cannot be resolved through short-term price adjustments alone; it requires either capacity rationalization or a demand recovery to achieve rebalancing.