On July 1, the polyester filament yarn market sent a stark signal: the average sales-to-production ratio among sample enterprises fell to 35.8%, down 3 percentage points from the previous trading day. This means over 60% of production capacity failed to convert into actual sales. In what is traditionally viewed as a low season for July, this figure has dipped below the industry's expected threshold, revealing a deep-seated tug-of-war along the chemical fiber supply chain.
Price Stalemate: Resistance vs. Essential Demand
Looking at the specific distribution of sales-to-production ratios, only a minority of sample enterprises recorded ratios above 50%, with the majority stuck in the 20%-40% range, and some even at zero. This distribution pattern indicates that the problem is not on the supply side but a systematic contraction in demand. Although polyester filament yarn mills have adjusted their list prices, actual transactions remain stable. Downstream users are exhibiting a classic "buy on rising, not on stable" psychology—when prices stop climbing rapidly, the urge to stockpile quickly fades.
Behind this resistance lies the continuous compression of profit margins for end-use textile enterprises. The price transmission of final products like fabrics and garments lags behind, while chemical fiber raw material costs have already climbed, squeezing weaving profits to a critical point. Consequently, downstream procurement strategies have shifted from "advance stockpiling" to "just-in-time purchasing," further exacerbating the low sales-to-production ratio.
Upstream Transmission: Crude Oil Stalls and Cost Expectation Divergence
Simultaneously, the international crude oil market is emitting complex signals. Although the Middle East situation remains volatile, crude oil prices have clearly lost their upward momentum. For polyester filament yarn, the weakening price support for direct raw materials like PTA and MEG means that the cost side can no longer unilaterally push polyester yarn prices higher.
This divergence in cost expectations has pushed the chemical fiber chain into a classic "price standoff": upstream mills are reluctant to lower prices due to inventory and profit pressures, while downstream users are unwilling to buy at high prices due to insufficient orders and thin margins. Both sides are waiting for the other to blink first, freezing market liquidity. Historical experience suggests that such standoffs typically last 2-4 weeks, followed by a directional break—either upstream mills cut prices to destock, or downstream orders are released in a concentrated burst. The current 35.8% ratio hints that the probability of price cuts to clear inventories is rising.
Industry Impact: Seasonal Effects and Structural Adjustments
July is traditionally a low season for the textile industry, with weaving enterprise operating rates typically declining seasonally due to high temperatures. However, this year's peculiarity is that the seasonal effect is superimposed on upstream price negotiations, resulting in a demand contraction exceeding that of previous years.
Notably, the employment risk in India's textile industry due to extreme heat is indirectly affecting global textile supply chain expectations. Data suggests that India's textile sector may lose 34 million jobs by 2030. This long-term trend will accelerate the shift of global textile orders to Southeast Asia and China, but the short-term demand vacuum still needs to be absorbed by domestic enterprises.
For the polyester filament yarn industry, the current low sales-to-production ratio is not entirely detrimental—it forces companies to optimize product mixes, reduce excess supply of conventional varieties, and shift towards differentiated, high-value-added products. Companies capable of offering functional polyester yarns or recycled polyester yarns demonstrate stronger resilience during market fluctuations.