The trading enthusiasm in the polyester filament yarn market is rapidly cooling. Public sales-to-production data on July 2 shows the average ratio among sample enterprises stood at only 31.7%, down 4.1 percentage points from the previous trading day. This figure has remained below the industry's breakeven line of 40% for several consecutive days, meaning over 60% of capacity has failed to translate into effective orders. More alarmingly, downstream users' resistance has not eased despite price concessions, pushing the market into a rare 'price without volume' deadlock.
Supply-Demand Imbalance Behind the Data
Looking at specific sample enterprise data, the situation is even more severe. Among the 25 surveyed companies, only 4 achieved a sales-to-production ratio above 50%, and only 11 exceeded 30%, while two reported 0%. Most others struggled in the 15%-35% range. This widespread slump is no accident—polyester filament yarn cash flow remains high, limiting upstream leeway for price reductions. Meanwhile, downstream weaving and texturing enterprises, facing weak end-apparel orders, would rather cut production than stockpile at high prices.
Data also shows no significant improvement on July 1 and July 3, with the entire quarter's chemical fiber market exhibiting a typical 'off-season in peak season' pattern. Behind this is a severe profit distribution misalignment across the supply chain: upstream polyester plants, supported by high crude oil costs, stick to price support strategies; midstream yarn producers lack incentive to cut prices due to decent cash flow; and downstream users, burdened by product inventory and weak consumption, have frozen procurement intentions.
Structural Contradiction: High Cash Flow vs. Weak Demand
The core contradiction lies in high polyester filament yarn cash flow coexisting with weak demand. Three factors contribute to this impasse:
- Cost support: International crude oil, though losing upward momentum, remains relatively high, keeping polyester raw material PTA and MEG costs elevated and indirectly supporting yarn price floors.
- Supply rigidity: Domestic polyester filament yarn capacity continues to expand, with operating rates above 85%, leading to accumulating inventory pressure due to insufficient supply elasticity.
- Demand contraction: The downstream textile and apparel sector faces dual shocks from Southeast Asian order diversion and domestic consumption downgrading. Grey fabric inventories are high, and loom operating rates have generally fallen to around 60%.
This structural supply-demand imbalance is unlikely to ease in the short term. Without proactive upstream production cuts or a revenge bounce in downstream demand, the price tug-of-war may extend into mid-to-late Q3. For buyers, this means bargaining power is increasing, but the timing for bottom-fishing has not yet arrived.
Dual Pressure from Foreign Trade and Domestic Sales
From the foreign trade perspective, exports of polyester filament yarn and downstream products also face challenges. On one hand, Southeast Asian countries are expanding textile capacity, reducing their dependence on Chinese chemical fiber raw materials. On the other hand, EU and US markets are imposing more restrictions on Chinese textiles, including green trade barriers and anti-dumping investigations. The domestic market suffers from weak consumer confidence, with apparel retail data showing slowing growth for three consecutive months.
Notably, extreme heatwaves affecting major textile producers like India are indirectly impacting China's chemical fiber market. If India's textile industry reduces output due to heat, the global textile supply chain will reshuffle, potentially bringing short-term order transfers to China. However, total global demand is not increasing.