On June 30, the polyester filament yarn market experienced a sudden freeze in trading activity. Industry data shows that the average sales-to-output ratio among sample enterprises was only 38.8%, a sharp drop of 34.4 percentage points from the previous trading day. This figure not only means that over 60% of production capacity failed to convert into actual orders but also reveals that after the digestion of recent urgent restocking, the purchasing willingness of downstream weaving mills has hit rock bottom.
Behind the Sales Cliff
Looking at the distribution of sales ratios among sample enterprises, the ratios ranged from 0% to 70%, but more than half of the firms reported ratios of 30% or below, with two firms recording zero sales. This extreme divergence shows that the market is not uniformly shrinking but rather displays a pattern of "concentration at the top and collapse at the bottom"—a few companies maintained relatively stable shipments due to product differentiation or customer loyalty, while most others nearly stalled.
The direct trigger for this cliff-like decline was the urgent restocking by some clients the previous day. Once these emergency orders were fulfilled, market participation quickly faded, indicating that downstream weaving mills have no intention of building safety stocks and are only adopting a "buy as needed" strategy to cope with uncertainty. For upstream polyester plants, this means that the old tactic of stimulating hoarding through price hike expectations has failed, and the true weakness in demand is surfacing.
Reversal of Upstream-Downstream Transmission
The sharp drop in polyester filament yarn sales is essentially an accelerated signal of weak end-demand transmitting upstream. Typically, when the sales-to-output ratio falls below 40%, polyester plants face rapid inventory accumulation. When inventory days exceed 20, plants are forced to adopt price cuts or production cuts to balance supply and demand.
On the cost side, crude oil prices have lost upward momentum amid repeated fluctuations in the Middle East situation, and cost support from raw materials like PTA and MEG has weakened, further reducing downstream urgency for stockpiling. The textile upstream and downstream are locked in a classic price tug-of-war: upstream wants to maintain profit margins, while downstream uses low operating rates and zero inventory strategies to force raw material prices down.
Notably, this transmission mechanism is reversing. In past years, the chemical fiber market was often cost-driven: when crude rose, polyester rose. Now, demand-side bargaining power has clearly strengthened—weak orders for final garments and home textiles squeeze upward through the weaving chain, eventually forcing polyester plants to face a "priced but not selling" dilemma.
Regional Industrial Belt Responses
From a regional perspective, the Jiangsu-Zhejiang area, as the main production and weaving cluster for polyester filament yarn, is directly impacted by the sales ratio volatility. The operating rate of water-jet looms in places like Shengze, Changxing, and Xiaoshan has fallen from over 80% at the beginning of the year to around 60%, with some small and medium-sized weaving mills even opting for temporary shutdowns to digest inventory.
Meanwhile, gray fabric trading volumes at the Keqiao Textile City have also declined month-on-month. Fabric traders generally report that the movement of conventional products like polyester taffeta and pongee has slowed noticeably. Downstream garment factories are cautious in placing orders for next spring and summer, preferring small batches and multiple orders to avoid inventory risk.
This regional demand contraction is forcing upstream polyester plants to adjust product mixes. Some have begun reducing output of standard varieties and increasing production of differentiated fibers like cationic and high-stretch yarns, attempting to use technical barriers to fend off price wars.