Uneven Market in Chemical Fiber: Downstream Demand Fails to Ease Price Standoff

Public data from the chemical fiber industry on July 1 reveals a warning signal: the average sales-to-production ratio for polyester filament yarn sample enterprises stood at only 35.8%, down 3 percentage points from the previous day. This figure means that more than 60% of production capacity failed to translate into actual transactions, pushing the market into a typical buyer wait-and-see phase.

Supply-Demand Standoff Behind the Slump

Among the 24 sample enterprises surveyed, only five achieved a sales-to-production ratio above 50%, with the highest at 85%. In contrast, 11 enterprises recorded ratios below 30%, including two with zero transactions. This extreme divergence indicates that while not all companies face the same difficulties, overall market vitality is rapidly declining.

Downstream users' strong resistance to high prices is the direct cause. Although polyester filament yarn manufacturers have adjusted their list prices, actual transaction prices remain largely stable, failing to stimulate buying. Weaving mills currently face insufficient orders and are still digesting inventory, naturally adopting a conservative 'buy-what-you-use' approach to raw material procurement.

Cost Transmission Falters, Chain Stalls

On the upstream side, crude oil prices lack clear upward momentum recently. Despite occasional fluctuations in the Middle East situation, the market has grown fatigued with geopolitical premiums. Intermediate products like PX and PTA have followed crude oil in narrow fluctuations, failing to provide strong cost support for polyester filament yarn.

Downstream, operating rates in dyeing, printing, and garment sectors remain tepid. Major textile exporting countries like India also face climate risks such as extreme heat. According to relevant forecasts, India's textile industry may lose 34 million jobs by 2030, which will profoundly impact the global textile supply chain's order distribution.

The current stalemate in the chemical fiber market essentially reflects a mismatch in price expectations between upstream and downstream players: upstream wants to protect profit margins, while downstream waits for clearer downward signals. This standoff is unlikely to break soon unless one of two scenarios emerges—a trend breakthrough in crude oil prices or a seasonal recovery in end-consumer demand.

Practical Recommendations

For Buyers - Adopt a phased procurement strategy to avoid bulk hoarding amid short-term price fluctuations. Monitor the basis between PTA futures and spot prices; when the basis narrows to within 100 yuan/ton, it may be an entry opportunity. - Prioritize suppliers with a stable sales-to-production ratio above 40%, as these companies typically have greater flexibility in price negotiations. - Establish a linkage mechanism with weaving mills to lock in raw material purchases based on your own order schedules, reducing inventory risk.

For Foreign Trade Companies - Pay attention to the impact of RMB exchange rate fluctuations on export order profits, and consider locking in exchange rates when signing forward contracts. - For potential capacity gaps in Southeast Asian markets like India, prepare alternative certificates of origin in advance to address customer concerns about supply chain stability. - Use the current window of relatively stable domestic raw material prices to negotiate quarterly or semi-annual framework agreements with overseas clients, locking in favorable prices.