On July 1, the average sales-to-output ratio of polyester filament sample enterprises fell to 35.8%, down 3 percentage points from the previous trading day. This number directly sent market sentiment into a deep freeze—below the industry-recognized breakeven line of 60%, it means that more than 60% of production capacity failed to translate into actual transactions, and inventory pressure is rapidly building.
The Plunge in Sales-to-Output Ratio: What the Data Tells Us About Demand
The 35.8% ratio is not an isolated case. Looking at the specific data from 24 sample enterprises disclosed on that day, the ratio distribution showed a clear polarization: the highest reached 85%, but several companies reported zero sales. The middle range was concentrated between 20% and 40%, reflecting an overall extremely weak buying willingness in the market.
More notably, this data emerged against a backdrop where polyester filament manufacturers had adjusted their listed prices but actual transactions remained stable. Manufacturers attempted to stabilize market expectations through price signals, but downstream users' 'high-price resistance' proved stronger than anticipated. Public industry data indicates that when end demand cannot absorb upstream costs, prolonged low sales-to-output ratios often serve as a precursor to price declines.
Upstream-Downstream Game: The Breaking Point of Cost Transmission
The current impasse is essentially a double squeeze from costs and demand. On one hand, crude oil prices have lost upward momentum amid repeated fluctuations in the Middle East situation, weakening support for polyester raw material costs. On the other hand, the recovery of orders in the downstream textile and apparel sector is sluggish, with weaving mills maintaining low operating rates and only purchasing polyester filament for 'essential replenishment.'
This tug-of-war between 'upstream price support' and 'downstream price suppression' is fully reflected in the early July production-sales data. Downstream users prefer to reduce operating rates rather than accept high-priced raw materials, while upstream factories dare not easily cut prices due to inventory pressure. The 35.8% ratio is a typical product of this stalemate. For buyers, this means bargaining power is expanding, but the timing of entry still requires careful judgment.
Industrial Transmission: Full-Chain Pressure from Chemical Fiber to Weaving
The direct consequence of the declining ratio is the rapid accumulation of social inventories of polyester filament. According to industry practice, if the ratio remains below 50% for a consecutive week, factories face the risk of overflowing warehouses, significantly increasing the probability of being forced to cut prices to destock. This sends a clear signal to weaving mills: maintain a wait-and-see approach in the short term and wait for lower procurement costs.
However, risks also exist. If upstream factories choose to jointly limit production to support prices, supply contraction may offset the impact of weak demand, and prices could find support. Historically, July is typically a traditional off-season for the textile industry, and the chemical fiber market often experiences a 'volume and price decline' trend. This year, compounded by slowing global economic growth and the long-term concern over extreme heat in India impacting textile employment, market sentiment is even more fragile.