On July 3, the average sales-to-production ratio of polyester filament yarn sample enterprises was only 33.0%, up a negligible 1.3 percentage points from the previous trading day. This figure means that more than 60% of the day's capacity failed to translate into actual sales, with inventories accelerating. More notably, among the 20-plus sample enterprises, only one achieved a ratio exceeding 100%—an outlier at 200%, likely due to sporadic orders—while the rest struggled in the 15%-50% range.
Production-Sales Deadlock: Structural Contradictions Behind the Data
A sales ratio persistently below 40% is not unprecedented in the chemical fiber industry, but this round of 'sluggishness' has its own characteristics. From an industrial chain perspective, upstream PTA and MEG prices have been fluctuating narrowly, failing to provide effective cost support. Although downstream weaving mills maintain operating rates around 70%, new orders are dominated by short-term, small-lot transactions, lacking sustained demand pull. Polyester filament yarn manufacturers are clearly divided: some choose to cut prices to stimulate sales, while others hold firm, betting on cost recovery to boost market sentiment. This divergence directly leads to chaotic market quotes, making downstream users more cautious.
Specifically, more than half of the sample enterprises reported ratios below 30%, including extreme lows of 0%, 15%, and 20%. This is not a problem of individual companies but a collective dilemma for the entire midstream chemical fiber sector. When the sales ratio stays below the breakeven point for an extended period, destocking pressure will force more enterprises to join price reductions, potentially triggering a price war.
Double Squeeze from Inventory and Orders
The core contradiction in the current chemical fiber market is not about absolute price levels but the 'liquidity trap' of having prices but no transactions. Inventory days for the three main polyester filament yarn varieties—POY, FDY, and DTY—have risen for three consecutive weeks, with some specifications approaching historical highs for the same period. Meanwhile, although terminal textile and apparel export data showed month-on-month improvement in May, year-on-year growth still fell short of market expectations, with limited restocking from European and American buyers.
Feedback from downstream weaving and dyeing sectors is more direct: operating rates are stable, but order delivery cycles are shortening, and willingness to stock up has hit rock bottom. July and August are traditionally the off-season for the textile industry. This year, factors such as increased volatility in raw material prices and diversion of foreign trade orders to Southeast Asia have made 'essential replenishment' the only choice for downstream players. Under this model, it is difficult for polyester filament yarn companies to leverage short-term promotions to stimulate incremental demand, and inventories will only continue to pile up.
Bidirectional Stalling: Cost Side and Demand Side
From the cost side, international crude oil prices have been oscillating in the $75-80/barrel range, compressing processing margins for PX and PTA. However, this has not been transmitted to polyester filament yarn because downstream buyers are not taking delivery, and traders are reluctant to hold inventory. Polyester chips and polyester staple fiber face similar difficulties, trapping the entire polyester chain in a deadlock of 'costs not rising, demand not moving, and inventories not falling.'
This stalemate has structural impacts on the industry. On one hand, small and medium-sized chemical fiber plants are under increasing cash flow pressure, with some already taking proactive production cuts or maintenance shutdowns. On the other hand, large enterprises, leveraging their scale advantages and long-term contract customers, can maintain basic production and sales, but their profit margins are significantly compressed. Industry concentration is likely to increase further during this adjustment, but at the cost of small-capacity closures and job losses.
Practical Recommendations
For Buyers - Current raw material prices are at a cyclical low, but downside risk remains. Purchase in batches based on actual needs to avoid large one-time stockpiling. - Closely monitor upstream PTA cost changes and crude oil trends. If costs rebound significantly, consider moderately increasing purchase volumes to lock in low prices. - Negotiate flexible delivery schedules with suppliers. Use the current buyer's market advantage to secure better payment terms and longer credit periods.
For Foreign Trade Companies - Adopt a floating pricing model (raw material cost + processing fee) for export orders to hedge against profit erosion from raw material price fluctuations. - Monitor the recovery of textile capacity in Southeast Asia. If local orders pick up, it could indirectly boost demand for domestic polyester filament yarn exports. - Use the current weak domestic market window to advance procurement of autumn/winter fabrics, preparing for the peak season starting in September.
The stalemate in the chemical fiber market will not last forever. When inventory pressure breaks a critical threshold, or when an unexpected shock hits the cost side, the market will inevitably choose a direction. For every participant in the industrial chain, the priority now is not to bet on direction but to manage liquidity and hedge risks.