Polyester POY Price Easing: Industry Pressure and Procurement Strategy Shifts

The latest quotation for polyester POY (150D/48F semi-dull) has fallen below 8,200 yuan/ton, with Rongsheng Petrochemical at 8,200 yuan/ton and Juxing Chemical Fiber at 8,050 yuan/ton. This price level, significantly lower than earlier peaks, reflects the painful rebalancing of supply and demand in the chemical fiber industry chain.

Supply-Demand Logic Behind Price Easing

On the supply side, upstream PTA and MEG prices continue to weaken, reducing cost support. Polyester plant operating rates remain high, but POY inventories have risen to near two-month highs, increasing destocking pressure. As industry leaders, the price cuts by Rongsheng and Juxing signal that smaller producers may follow. The demand side is more critical: downstream weaving mills operate at less than 60% capacity, with high grey fabric inventories. Purchases are limited to urgent small orders, with little willingness to stockpile. This synchronized weakness between upstream and downstream is not a short-term fluctuation but a structural adjustment.

Regional Transmission Effects

The quotations are concentrated in Zhejiang Province, with a 150 yuan/ton spread between Hangzhou and Shaoxing, reflecting differences in inventory and cost control. Rongsheng, located in Hangzhou, benefits from an integrated industrial chain for better cost resilience, while Juxing, closer to downstream markets in Shaoxing, may be pricing lower to accelerate sales. If this regional gap widens, cross-regional arbitrage could further disrupt pricing. Weaving clusters have begun adjusting procurement strategies: some shift from regular POY to FDY or DTY to avoid homogeneity; others extend payment terms to force upstream concessions. This indicates a gradual shift of pricing power from factories to buyers.

New Disturbances from Foreign Trade and Exchange Rates

Current RMB exchange rate volatility presents a dual impact on export-oriented textile firms. A weaker yuan boosts export earnings in dollar terms but raises imported raw material costs. Overseas buyers remain cautious, shortening order cycles and becoming more price-sensitive for intermediates like POY. Exporters must guard against profit erosion from post-quote exchange rate changes. Globally, Southeast Asian textile capacity is recovering faster than expected, with some orders returning to Vietnam and Bangladesh, further weakening domestic POY demand—a substitution effect unlikely to reverse soon.

Practical Recommendations

For Buyers - Maintain low inventory, replenishing only for urgent orders; avoid bulk stockpiling. - Monitor maintenance schedules of leading firms like Rongsheng and Hengli; if concentrated shutdowns occur, they could temporarily tighten supply, providing an opportunity to lock in forward contracts. - Leverage regional price differences, prioritizing suppliers in Shaoxing and Xiaoshan for better terms or freight subsidies.

For Exporters - Include exchange rate fluctuation clauses in contracts or use forward settlement tools to lock in profits. - For Southeast Asian markets, promote differentiated POY products (e.g., cationic dyeable, moisture-wicking) to avoid price wars on standard grades. - Closely track anti-dumping investigations by the US and EU on polyester products, adjusting export destination structures proactively.