On June 7, Shaoxing Jiabao adjusted its spot prices for FDY polyester filament yarn across all specifications, with semi-dull and bright categories dropping by 150 to 200 RMB per ton. For instance, semi-dull FDY 75D/36F was quoted at 8,410 RMB/ton, while bright FDY 150D/48F was listed at 8,610 RMB/ton, both showing significant declines. Although this price adjustment comes from a single company, it carries typical signal significance in the current context of high polyester chain inventories and weak downstream demand.
Supply-Demand Imbalance Drives Active Destocking
This price cut is not an isolated event. On July 6, the main contract for polyester staple fiber (PSF) on the Zhengzhou Commodity Exchange closed at 6,858 RMB/ton, up 74 RMB/ton from the previous day, but open interest increased by 15,420 lots, indicating growing divergence between bulls and bears and that the futures market has already priced in bearish sentiment from the spot side. FDY and PSF are both downstream products of the polyester chain; the FDY price reduction directly dampens overall market sentiment in the polyester sector.
Industry data shows that average inventory days at domestic polyester factories have climbed to 18-22 days, exceeding the normal level of 15 days. Shaoxing, as one of China's largest polyester filament yarn production bases, faces even more acute inventory pressure due to high capacity concentration. Jiabao's price reduction is fundamentally a strategy to actively offer discounts, accelerate cash flow, and destock in a loose supply-demand environment.
Impact on Downstream Weaving Procurement Strategies
For weaving clusters in Shengze, Shaoxing, and Changxing, the FDY price drop means a short-term reduction in raw material procurement costs. However, the more noteworthy signal is that this may trigger a 'buy on rising, not falling' psychology among downstream mills—when prices are in a downtrend, weavers tend to maintain low inventories and adopt a hand-to-mouth procurement strategy rather than large-scale restocking. This, in turn, could prolong the destocking cycle for polyester plants.
By product category, semi-dull FDY 75D/36F is mainly used for high-density fabrics and faux silk products, while bright FDY 150D/48F is often used for linings and bag fabrics. The impact of these price cuts varies across sub-markets: high-value-added fabric makers have lower procurement elasticity, while low-end lining producers may be more sensitive in adjusting their stocking plans.
Price Transmission and Expectations in the Polyester Chain
At the raw material end, PTA and MEG prices have recently been oscillating within a narrow range, with no significant collapse on the cost side. Therefore, this round of FDY price cuts is primarily a result of supply-demand imbalance within the polyester segment itself. If more polyester plants follow suit with price reductions, it could trigger a chain-wide price revaluation:
- Upstream PTA plants may face greater bargaining pressure, especially those relying on purchased raw materials
- Intermediate traders' inventory values will shrink, forcing them to accelerate destocking
- End-apparel brands may further delay procurement cycles, waiting for lower prices
It is worth noting that the current PSF futures market is relatively strong, diverging from spot market sentiment. This widening basis may attract hedging positions, thereby capping the upside for price recovery on the futures side.