Polyester Filament Sales Plunge: The Chilling Signal Behind 38.8%

On June 30, the average sales-to-production ratio of polyester filament sample enterprises plummeted to 38.8%, a staggering drop of 34.4 percentage points from the previous trading day. This figure not only set a new recent low but also declared the end of a brief market recovery. Public industry data shows that most enterprises recorded ratios between 20% and 50%, with some even hitting 0%.

Background

The trigger for this sharp decline was a concentrated restocking by a few buyers based on urgent needs the day before. However, this wave of purchases quickly exhausted short-term buying power, and interest evaporated rapidly afterward. Data distribution reveals that only a handful of companies achieved ratios above 60%, while over half were below 40%, indicating that downstream weaving mills remain in a wait-and-see mode with no sustained buying momentum.

This phenomenon is not isolated. Looking at recent market dynamics, the repeated turmoil in the Middle East has caused crude oil prices to lose upward momentum, directly weakening cost support for chemical fibers. Meanwhile, extreme heatwaves in India are projected to eliminate 34 million textile jobs by 2030, shaking confidence in the global textile supply chain. These internal and external factors have plunged the entire textile upstream-downstream chain into a protracted price tug-of-war.

Industry Impact

What does a 38.8% sales-to-production ratio mean? For polyester filament producers, it signals mounting inventory pressure. Typically, a ratio below 50% is considered a sign of market weakness, while below 40% indicates a significant risk of unsold goods. Companies face a dilemma: either cut prices to clear inventory, eroding profits, or maintain prices but bear the cost of capital tied up in stock.

For downstream weaving and garment manufacturers, this data sends a clear signal about the procurement window. Current polyester filament prices are in a weak position but have not yet reached most buyers' psychological floor. The market generally expects that if the ratio remains low, upstream producers may be forced to offer discounts, potentially creating a price trough in mid-to-late July. However, this depends on the recovery of end demand—if apparel export orders do not improve, even cheaper raw materials may not trigger large-scale buying.

From a supply chain transmission perspective, the plunge in the sales ratio will also affect upstream PTA and MEG markets. Polyester plant operating rates may be forced down, reducing demand for raw materials and creating a negative feedback loop. Data from the Huaxianbang platform shows a significant increase in attention to polyester chips and filament, indicating market participants are closely tracking this dynamic for entry opportunities.

Practical Recommendations

For Buyers - Stay cautious but prepared: Current prices are still in a downward channel. It is recommended to split orders into smaller, more frequent batches to avoid concentrated restocking at high prices. Focus on mid-July sales data; if the ratio remains below 40% for three consecutive days, it could signal a price bottom. - Explore substitution opportunities: During the weak polyester filament price period, evaluate price spreads with other fibers like polyester staple or viscose, and adjust procurement mixes to lower overall costs.

For Foreign Trade Enterprises - Lock in forward orders early: Use current low raw material prices to sign forward contracts with overseas customers, securing cost advantages. Include price adjustment clauses in contracts to hedge against potential upstream rebounds. - Diversify supply chain risks: The job loss warning from India's textile sector indicates a global capacity reshuffle. Assess costs and lead times of alternative production bases in Southeast Asia and South Asia to avoid over-reliance on a single region.