On July 3, the average sales-to-production ratio for sampled polyester filament yarn (PFY) enterprises fell to 33.0%, a mere 1.3 percentage point increase from the previous trading day. This figure indicates that over two-thirds of the day's production capacity failed to translate into actual sales, highlighting the severity of market stagnation.
Divergence in Sales Performance: Local Recovery Masking Overall Weakness
A closer look at the sample data reveals extremely uneven distribution. Among the 20 sampled companies, only one achieved a ratio of 200%, while the majority ranged between 10% and 50%. More than half of the companies recorded ratios below 30%, with the lowest at 0%, and several others hovering between 15% and 20%. This extreme divergence suggests that the market is not experiencing a broad recovery; rather, a few firms managed short-term destocking through aggressive price cuts or special customer channels, while most still face significant sales difficulties.
Manufacturer Sentiment Divided: Price Negotiation Enters a Stalemate
Faced with low sales ratios, PFY manufacturers have adopted distinctly different strategies. Some have chosen to lower offer prices to stimulate downstream just-in-time replenishment, but with limited effect—overall trading remains sluggish, with only local pockets of temporary improvement. Others are holding prices firm, betting on cost-side support or future demand recovery. This divergence reflects uncertainty about the market outlook: upstream raw material prices and macroeconomic expectations have not provided clear direction, while downstream weaving mills, with adequate existing inventories, are purchasing only for immediate needs and will not stockpile heavily simply because of minor price concessions.
Weak Downstream Demand: Cautious Transmission from Weaving Sector
The root cause of PFY's persistently low sales ratio lies in the tepid final demand from the textile and apparel sector. Downstream weaving mills are facing insufficient orders and thin profit margins, leading to conservative procurement strategies. Even when some PFY producers lower prices, downstream mills adopt a "buy-as-needed" approach, unwilling to take on additional inventory risk. This cautious sentiment continues to build inventory pressure on upstream polyester plants, and unless demand improves significantly in the short term, the price standoff may intensify.
Industry Impact: Inventory Accumulation and Cash Flow Strain
Low sales ratios directly lead to rising social inventories of PFY, tying up substantial corporate capital. For small and medium-sized polyester plants, cash flow pressure is particularly acute. Some may be forced to cut production or schedule maintenance shutdowns to relieve inventory pressure, which would help balance supply but also means lower operating rates. If production cuts expand, they could drag down demand for upstream PTA and MEG, further weakening raw material markets.