A seemingly negligible drop of 18.75 yuan per ton tells a deeper story of capacity digestion in the polyester filament yarn chain. On July 3, Kaisi Group adjusted its DTY (150D/48F, AA grade, semi-dull) offer to 9300 yuan/ton, breaking a multi-day sideways trend despite being only 0.2% lower than the previous day's market benchmark.
The Logic Behind the Price Adjustment
On the raw material side, the narrow fluctuations of PTA and MEG at the end of Q2 failed to provide clear cost support for polyester filament yarn. More critically, melt-spinning DTY capacity has been steadily released since early 2024, particularly for standard specifications like 150D/48F, where supply has outpaced downstream weaving demand growth. As a major polyester producer in East China, Kaisi's offer adjustment often serves as a bellwether—when a leading player eases prices, smaller mills quickly follow suit.
Notably, the current AA-grade semi-dull DTY price represents a cumulative decline of over 150 yuan/ton compared to early June. For weaving mills with monthly purchases exceeding 100 tons, this translates to raw material cost savings of over 15,000 yuan. The bigger question: how long will this downtrend last?
Upstream-Downstream Transmission: The Inventory Game
The DTY price softening directly impacts circular knitting and water-jet weaving clusters in Jiangsu and Zhejiang provinces, especially in Shaoxing, Xiaoshan, and Changle. These small-to-medium mills typically operate on a just-in-time procurement basis with 7-10 day inventory cycles. The 9300 yuan/ton level sits near many purchasing managers' psychological cost line—further declines could trigger restocking, while stabilization would shift them into wait-and-see mode.
Trade feedback indicates that DTY social inventory is at a moderately high level, but downstream grey fabric inventory remains elevated due to the 'small batch, multiple SKU' trend in end-use garment orders. This scissors gap between falling raw material costs and sluggish fabric sales is squeezing weaving margins.
Outlook: Floor or Halfway Point?
In the short term, further DTY price declines are limited. Key supports include: PTA processing margins have compressed below 300 yuan/ton, strengthening mill price defense; polyester filament yarn cash flows are near breakeven, reducing motivation for further cuts. However, medium-term pressure remains—over 60% of new polyester capacity slated for H2 2024 is concentrated in filament yarn, with DTY accounting for a significant share.
For foreign trade firms, exchange rate volatility and high ocean freight have already eroded export margins, making any raw material cost relief a critical lifeline. Close monitoring of mid-July polyester industry meetings and PTA plant maintenance schedules is advised, as these events often catalyze price inflection points.