In early July, a warning signal emerged in the polyester chain: Rongsheng Petrochemical (including Shengyuan) cut its polyester FDY offer by 100-200 yuan/ton for selected specifications. Semi-dull FDY 75D/36F was quoted at 8,500 yuan/ton, 150D/96F at 8,300 yuan/ton, and 300D/96F at 8,400 yuan/ton. PriceSeek assigned a bearish rating of -1, calling it a generally negative move. But Textile Circle believes this reflects deeper shifts in the polyester supply-demand landscape.
Price Cut: Dual Pressure from Inventory and Operating Rates
The direct driver is inventory buildup. By end-June, polyester filament inventory had climbed to 25-30 days, well above the healthy 15-day level. Downstream weaving mill operating rates dropped from 75% in May to 68%, with water-jet loom utilization in Jiangsu-Zhejiang falling below 70%. End-user orders remain short-cycle and small-lot, lacking sustained replenishment momentum. As an industry bellwether, Rongsheng's price move often sets a benchmark, and other polyester plants are expected to follow suit, further depressing market sentiment.
Upstream Transmission: PTA Overcapacity Is the Root Cause
The pressure originates from the feedstock side. PTA capacity has expanded continuously since 2024, with new capacity this year expected to exceed 6 million tons, pushing total capacity toward 90 million tons. Meanwhile, downstream polyester demand growth is only 3%-5%. This mismatch has squeezed PTA processing margins below 300 yuan/ton, forcing some units to cut operating rates. Weak PTA prices directly undermine cost support for polyester filament. This transmission chain is stark in July: every link from PX to PTA to polyester filament is suffering destocking pains.
Regional Industrial Cluster Response: Declining Utilization in Shengze and Changxing
In key polyester filament consuming clusters like Shengze, Changxing, and Xiaoshan, weaving mill operating rates have declined for three consecutive weeks. Water-jet loom utilization in Shengze dropped to 65%, while in Changxing, some small and medium enterprises have suspended production due to environmental inspections and insufficient orders. Under inventory pressure, weaving mills have shifted to a 'buy-as-needed' procurement strategy, actively destocking. This wait-and-see attitude in turn exacerbates polyester plants' sales difficulties, creating a negative feedback loop of 'upstream price cuts - downstream wait-and-see - further upstream cuts'.
Indirect Bearish Impact on Polyester Staple Fiber
The price adjustment has spilled over to the polyester staple fiber (PSF) market. PriceSeek gave PSF a bearish rating of -0.5, labeling it an indirect negative. However, the overall polyester sector sentiment is weak, putting pressure on PSF futures. PSF industry operating rates are around 82%, with inventory of about 13 days, slightly better than filament. But if filament prices continue to decline, PSF will find it hard to remain unaffected. Both are polyester fibers with significant overlap in end-use applications and strong price correlation.
Q3 Outlook: Weak Volatility, Focus on Costs and Policy
Looking ahead to Q3, polyester prices are likely to remain weak and volatile. Three key variables: first, whether the PTA maintenance season in July-August can effectively reduce supply; second, whether downstream textile and apparel export orders can recover before the traditional peak season in September; third, the impact of crude oil price fluctuations on PX costs. Currently, PTA maintenance plans are limited, export orders show no clear improvement, and oil prices face high uncertainty due to macro factors. Overall, polyester FDY prices still have room to decline in the 8,300-8,600 yuan/ton range.