35.8%—that was the average sales-to-production ratio of sampled domestic polyester filament yarn enterprises on July 1, down another 3 percentage points from the previous trading day. Market transactions have been sluggish for some time, but this figure is now approaching the year's low range. Downstream users have collectively 'gone flat,' buying only for immediate needs. What does this mean?
Sales Ratio Breakdown: Reading Market Sentiment from the Data
According to public data from China Customs, on July 1, among the sampled polyester filament yarn enterprises, the highest sales-to-production ratio was only 85%, and several companies reported zero transactions. Out of 24 sampled firms, five had ratios below 20%, with the lowest at zero. Although manufacturers adjusted their list prices, actual transactions remained largely stable, indicating that sellers were reluctant to cut prices.
This deadlock of 'sellers holding prices and buyers watching' reflects a deep divergence in price expectations between upstream and downstream. Upstream polyester plants can still bear inventory pressure and are unwilling to give up margins easily; while downstream weaving and texturing companies generally resist current price levels, preferring to reduce operating rates and wait for opportunities rather than buying at high prices.
Cost Transmission Failure: The 'Bowel Obstruction' in the Polyester Chain
Polyester filament yarn prices are usually closely linked to upstream raw material costs like PTA and MEG. However, the current problem is that cost increases are not being smoothly passed downstream. PTA prices remain high due to international oil prices and tight PX supply, squeezing polyester plants' processing margins. Yet end-demand for textile products remains weak—neither domestic apparel and home textiles nor export orders show significant improvement.
This creates a classic 'cost-push, demand-drag' squeeze. Weaving companies have thin margins on orders, reducing their tolerance for high raw material prices. The declining sales ratio is essentially a concentrated manifestation of imbalanced profit distribution along the chain.
Regional Industrial Belt Reactions: A Wait-and-See Wave from Shengze to Changxing
Feedback from industrial belts indicates that in Jiangsu and Zhejiang—especially key polyester filament consumption areas like Shengze, Changxing, and Xiaoshan—weaving enterprises' operating rates have recently loosened slightly. Some small and medium factories have chosen staggered production or direct shutdowns for maintenance to reduce raw material procurement pressure. This 'trading time for space' approach will further suppress polyester filament sales ratios in the short term, but may also trigger a wave of restocking at month-end.
Notably, on the foreign trade front, Southeast Asian markets continue to substitute for mid-to-low-end polyester fabrics, limiting growth in Chinese export orders. This further weakens downstream purchasing confidence.
Short-Term Outlook: When Will the Stalemate Break?
Historically, if the sales ratio stays below 40% for more than a week, polyester plants will likely initiate 'production cuts to support prices' or 'price promotions.' Given that PTA cost support remains, significant price cuts are unlikely, but some factories with weaker cash flows may start to loosen first. The polyester filament yarn market is expected to maintain a 'weakly stable' pattern over the next week, with actual transaction prices potentially retreating by 50-100 yuan per ton.
For downstream users, now is not the time to bottom-fish, but they can watch for periodic low-price opportunities when factories push for month-end sales targets.