Polyester Filament Yarn Sales Rate Drops to 33%, Chemical Fiber Market Enters Deep Price Bargaining Zone

On July 3, the average sales-to-output ratio for polyester filament yarn (PFY) sample enterprises stood at only 33%, a meager 1.3 percentage point increase from the previous trading day. This figure implies that nearly 70% of production capacity failed to translate into actual sales. Against the backdrop of a traditional off-season and easing raw material costs, the chemical fiber market is experiencing a psychological tug-of-war between supply and demand.

Divergent Sales Data

A closer look at individual sample enterprises reveals extreme divergence: most companies reported ratios between 15% and 40%, with the lowest hitting 0%. However, one outlier reached 200%. This anomaly likely reflects a short-term inventory clearance through aggressive price cuts or special customer channels, not a market-wide recovery. Excluding this outlier, the median sales ratio hovers around 30%, indicating very low restocking willingness among downstream weaving mills.

PFY manufacturers are clearly divided in sentiment. Some have chosen to lower prices to free up cash flow, while others hold firm, betting on a demand rebound. This divergence reflects a lack of consensus on the market outlook and amplifies uncertainty.

Double Squeeze from Raw Materials and Demand

The cost support for PFY is weakening. International crude oil prices, buffeted by recurring tensions in the Middle East, have lost upward momentum, dragging down upstream feedstocks like PTA and MEG. Without a solid cost floor, downstream users are more inclined to wait and see.

On the demand side, the textile industry has entered the traditional off-season, with orders for finished garments shrinking and weaving mill operating rates declining broadly. Even where local PFY prices have been cut, downstream buyers only make need-based replenishments, unwilling to build inventory. The prevailing expectation—"prices won't rise soon, and supply won't run out"—is solidifying a wait-and-see attitude.

Industry Impact: Prolonged Price Bargaining

The current PFY market exhibits classic "buyer's market" characteristics: ample supply, rising inventory pressure, cautious procurement, and stronger buyer bargaining power. Unless crude oil prices rebound in the short term, PFY prices may continue to face downward pressure until they hit the cost line of some small and medium-sized producers, triggering involuntary production cuts.

For upstream polyester plants, persistently low sales ratios mean longer inventory turnover days and higher capital occupation costs. Cash-strapped firms may be forced to deepen price cuts, potentially sparking a new round of price wars. For downstream weaving and dyeing mills, lower raw material costs reduce procurement expenses but complicate pricing for customer orders, as clients often demand lower finished product prices.

Practical Recommendations

For Buyers - Adopt a "batch procurement, need-based replenishment" strategy to avoid holding large inventories during a downward price cycle, reducing the risk of inventory depreciation. - Monitor raw material trends closely (crude oil, PTA, MEG). When crude shows consecutive rebounds, consider increasing order volumes to lock in low prices. - Negotiate short-term price protection agreements or floating price clauses with suppliers to cope with frequent fluctuations.

For Foreign Trade Companies - Build price adjustment buffers into export quotes, using quarterly or monthly pricing mechanisms to prevent losses from sharp domestic raw material price declines. - Prioritize developing high-end markets with lower price sensitivity (e.g., functional fabrics, eco-friendly recycled fibers) to avoid low-price competition. - Lock in raw material costs for forward export orders by using futures or forward contracts while prices are low.

For Mills - When the sales ratio falls below 40%, consider reducing operating rates to 70%-80% to prevent further inventory buildup. - Adjust product mix to increase the share of high-value differentiated products (e.g., cationic dyeable, flame-retardant, antibacterial PFY) and reduce competition in commoditized grades. - Establish "joint inventory management" with downstream customers to share inventory data and reduce supply chain risks.