The thermometer of the polyester filament market hit below freezing on July 1. Public industry data shows the average sales-to-production ratio of sample enterprises was only 35.8%, down 3 percentage points from the previous trading day. More notably, nearly half of the 24 sample companies reported ratios below 30%, with the lowest reaching zero. This is not an isolated technical indicator—it means that more than 60% of daily polyester filament output is directly converted into inventory.
The 'Blunt Knife' Effect from the Demand Side
The continued decline in the sales-to-production ratio is superficially due to downstream users' 'resistance to high prices.' But looking deeper, it reflects shrinking orders in end-use sectors like apparel and home textiles. Fabric mills and weaving factories lack new orders, so they have no incentive to stockpile raw materials. Although polyester filament manufacturers have nominally adjusted their list prices, actual transaction prices remain stable—this precisely shows that sellers dare not cut prices significantly (fearing deeper wait-and-see behavior) nor raise them (as buyers simply won't engage). The market is stuck in a 'stable on the surface, secretly weakening' stalemate.
From an industrial transmission perspective, as the core midstream product in the chemical fiber chain, polyester filament's sales ratio directly impacts demand expectations for upstream PTA and MEG. When the filament sales rate remains below 40% for consecutive days, polyester plants face pressure to reduce operating rates, which in turn forces PTA prices to loosen. This reverse price pressure, transmitted from downstream to upstream, is more persistent in squeezing industry profits compared to cost-driven fluctuations.
A New Game Under Inventory Cycle Shift
The current sales ratio data effectively sounds the alarm for an inventory cycle shift. Over the past two years, the chemical fiber industry was generally in an active restocking phase, with optimistic expectations and strong willingness to stockpile. But entering the second half of 2024, as the recovery of European and American textile orders fell short of expectations and domestic consumption growth slowed, the 'soft rope' of terminal demand finally snapped the 'hard rod' of upstream production.
For polyester plants, the dilemma now is twofold: if they maintain high operating rates, inventory pressure will further erode cash flow; if they proactively cut production, they risk losing market share and facing higher fixed-cost allocation. Historically, when the sales ratio stays below 40% for over two weeks, the industry typically enters a concentrated wave of maintenance shutdowns. At that point, polyester filament prices may shift from 'stable but secretly weakening' to 'openly declining' in exchange for sales volume and cash flow.
Practical Recommendations
For Buyers - Avoid large-scale price-locked purchases at current levels. In an environment of low sales ratios and high inventories, sellers' bargaining power is eroding. Adopt a 'small order, fast response' strategy, shorten order cycles, and leverage sellers' inventory-clearing anxiety to negotiate better spot discounts. - Closely monitor PTA and MEG price trends. Once upstream raw material prices begin to loosen, polyester filament ex-factory prices will follow suit quickly, providing opportunities for phased stockpiling.
For Export Enterprises - Build price fluctuation buffers into foreign quotes. Given the weak domestic market, some chemical fiber companies may divert excess capacity to exports, intensifying price competition overseas. Consider including price adjustment clauses in long-term contracts. - Keep an eye on the recovery of textile capacity in Southeast Asia. If order backflows to India, Vietnam, etc., remain below expectations, domestic polyester filament export pressure will increase further, necessitating early diversification of market channels.
Conclusion
A 35.8% sales-to-production ratio is not a number to be taken lightly. It is like a bucket of cold water thrown on the chemical fiber industry's just-revived confidence. But this also presents an opportunity for market self-correction—only those companies with strong cost control, diversified customer bases, and healthy cash flows will weather this consolidation and stand firm for the next cycle.