On July 1, the polyester filament yarn market saw sluggish trading, with the average sales-to-production ratio of sample enterprises dropping to 35.8%, down 3 percentage points from the previous day. As the textile industry enters its traditional off-season, this data is not an isolated incident—it reveals a deep-seated price tug-of-war and demand struggle between upstream and downstream sectors of the chemical fiber supply chain.
The Truth Behind Production and Sales Data
Looking at public production and sales data from sample enterprises, the ratios were highly uneven on that day: the lowest was 0%, while the highest reached only 85%, with most concentrated in the 20%-40% range. This means over half of the sample enterprises had ratios below the industry breakeven line. More notably, the presence of multiple enterprises with a 0% ratio indicates that some manufacturers are effectively in a 'priced but no sales' situation.
Although polyester filament yarn manufacturers adjusted their official list prices, actual transactions remained stable. This 'apparent adjustment but real stability' approach reflects the upstream sector's conflicting mindset—wanting to test market reactions through pricing changes but unwilling to make real concessions. The response from downstream weaving enterprises is more direct: widespread resistance to high prices, with procurement strictly limited to essential needs, eliminating any willingness to stockpile.
Upstream-Downstream Standoff: Why Cost Transmission Fails
The core contradiction in the current polyester filament yarn market lies in the mismatch between cost and demand. Raw material prices for PTA and MEG, influenced by crude oil fluctuations, have pushed up the cost base, theoretically driving up polyester filament yarn prices. However, end-use orders for apparel and home textiles have not recovered synchronously, with weaving enterprises generally operating at low capacity, limiting their ability to absorb raw materials.
This pattern of 'upstream rising, downstream not following' has concentrated profits upstream, leaving polyester filament yarn manufacturers as the 'sandwich layer': unable to fully pass on costs to downstream users, yet struggling to secure enough orders to utilize capacity. At 35.8%, the sales-to-production ratio has already hit the industry warning line. If it remains below 40%, manufacturers will be forced to proactively cut production or lower prices.
Regional Responses and H2 Expectations
Feedback from regional textile clusters in Jiangsu and Zhejiang (such as Shengze, Keqiao, and Changxing) indicates a widespread shortage of orders. Foreign trade orders have slowed due to high inflation and inventory backlogs overseas, while the domestic market lacks demand-driving hot products amid weak consumer confidence. This dual pressure has further tightened downstream procurement strategies from 'stocking as needed' to 'purchasing as ordered.'
Looking ahead to the second half of the year, three key variables deserve close attention:
- Crude oil price trends: If the Middle East situation remains volatile and oil stays high, polyester filament yarn will maintain cost support, but without improved demand, a 'cost-demand' squeeze will intensify.
- End-user destocking progress: The pace at which overseas brands clear inventory will directly determine the release of Q3 foreign trade orders.
- Industry operating rate adjustments: If the sales-to-production ratio remains low, more manufacturers are expected to join production cuts by mid-to-late July, potentially leading to substantial price adjustments.