On July 1, 2026, China's chemical fiber market delivered a worrying performance report. According to industry data, the average sales-to-production ratio for sampled polyester filament yarn (PFY) enterprises fell to just 35.8%, down 3.0 percentage points from the previous trading day. This means over 60% of production capacity failed to translate into actual sales, with inventory pressure quietly building upstream.
Structural Divergence Behind the Sales Data
More notable is the extreme divergence in sales ratios among enterprises. Data shows ratios ranging from 0% to 85%, forming a typical 'long-tail distribution.' Four firms reported zero sales, while nearly ten hovered between 20% and 30%. Only a few achieved over 60%. This structural split suggests the market is not fully stalled but that buyers are highly selective in price negotiations—explicitly rejecting high-priced brands or specifications while maintaining limited purchases for cost-effective products.
Downstream feedback indicates that 'persistent price resistance' is the core driver. Although PFY producers adjusted list prices, actual transactions remained stable without substantive concessions. This 'ostensibly stable, covertly soft' approach failed to attract cautious buyers, resulting in sluggish market activity.
Dual Squeeze from Costs and Demand
The current PFY market is caught between 'cost support' and 'weak demand.' On one hand, upstream raw materials like PTA and MEG remain elevated due to volatile international oil prices, limiting producers' room to cut prices. On the other hand, terminal textile and garment orders have not recovered as expected, especially in export markets facing exchange rate fluctuations and overseas inventory digestion, discouraging downstream weaving mills from stockpiling.
This tug-of-war reflects a conflict in profit distribution along the chain. Upstream mills try to protect margins by holding prices, while downstream users use 'rigid demand' procurement to force price cuts. Persistently low sales ratios mean the stalemate is unlikely to break soon. For producers, if inventory days exceed safe thresholds, more aggressive promotions may be forced in mid-to-late July. For buyers, the current price deadlock could be a window to reassess procurement timing and lock in forward orders.
Ripple Effects on Industrial Clusters
The impact is already visible in major chemical fiber clusters. In Shengze, Changxing, and Xiaoshan—key PFY production hubs—some small and medium-sized texturing mills have proactively reduced operating rates to cope with raw material inventory buildup and weak downstream orders. In fabric distribution centers like Keqiao and Nantong, weaving mills have extended raw material procurement cycles from 7-10 days to 15-20 days, further confirming cautious terminal demand.
By product type, conventional FDY and POY are hardest to sell, while differentiated products like cationic dyeable and sea-island filaments maintain relatively stable sales due to higher added value. This signals that homogeneous overcapacity is amplified during off-seasons, making product structure upgrade an urgent survival issue.