Polyester Filament Yarn Sales-to-Output Ratio Plunges 29 Percentage Points on July 7, End-User Restocking Intent Near Freezing Point

On July 7, trading activity in the polyester filament yarn market shrank abruptly. The average sales-to-output ratio of sampled producers was only 42.9%, a drop of 29 percentage points from the previous trading day. This means that for every 100 tons of polyester filament yarn produced that day, fewer than 43 tons were purchased by downstream buyers, with the remainder converted into factory inventory.

Behind the Sales Data

Looking at the sales figures from 23 sampled companies, the market divergence is stark. Only two companies achieved a ratio above 100%: one at 200% and another at 80%. Both likely used price discounts to clear inventory. The remaining 21 companies all posted ratios of 60% or below, with 16 of them below 40% and the lowest at just 10%.

• Ratio of 200%: 1 company (discount promotion)
• Ratio of 80%: 1 company (discount promotion)
• Ratio of 40%-60%: 5 companies
• Ratio of 20%-40%: 12 companies
• Ratio of 10%-20%: 4 companies

This 'two ends sharp, middle hollow' distribution indicates that the market has not turned completely cold; rather, buyers are extremely selective. Only sufficiently low prices can unlock limited essential demand.

Why Downstream Buying Suddenly Dried Up

Just one day earlier, on July 6, the ratio was still at a relatively high 71.9%. The cliff-like decline reflects a sharp shift in the restocking rhythm of downstream weaving mills. According to industry data, polyester filament yarn prices experienced a modest uptick of 100-200 yuan per ton from late June to early July. Initially, this triggered a wave of concentrated restocking. But as prices entered a high-level consolidation in the second week of July, combined with a lack of clear improvement in end-user orders, weaving mills quickly turned cautious.

A deeper reason lies in the persistent finished-goods inventory pressure at the weaving end. According to China Customs data and industry surveys, the growth rate of textile and garment exports slowed in June, and restocking demand following the '618' e-commerce promotion has largely been exhausted. With tight cash flow, end-users are reluctant to build inventory at high raw material prices, opting instead for a 'buy-as-needed, bargain-hunt' strategy.

Implications for the Supply Chain

The plunge in the sales-to-output ratio first impacts inventory management at polyester plants. At the current 42.9% ratio, unsold inventory accumulated in a single day accounts for about 57% of total output. If this persists for a week, the finished-goods inventory days of polyester plants will rise from the current 12-15 days to over 20 days, approaching a warning level.

Inventory pressure will force factories to adjust pricing strategies. The July 7 data already shows a few factories cutting prices to move goods, but most are still waiting. It is expected that over the next week, the polyester filament yarn market will see a wave of 'passive price cuts to destock', with prices of POY, FDY, and DTY potentially retreating by 100-200 yuan per ton.

For downstream weaving mills, the 'buy on rising, not on falling' mentality will intensify wait-and-see behavior in the short term. If raw material prices continue to decline, end-users will be more inclined to delay purchases in anticipation of even lower prices. Once such a negative feedback loop is established, the weak market for polyester filament yarn could extend into late July.

Practical Recommendations

For Buyers - Maintain inventory cycles of 7-10 days to avoid depreciation losses from price declines. - Closely monitor the sales-to-output ratios and inventory days of major polyester filament yarn producers. If the ratio stays below 50% for three consecutive days, a price-cut cycle is likely underway, and you can phase in replenishment at lower levels. - Prioritize communication with factories whose July 7 ratio exceeded 60%, as they may have more room for concessions.

For Polyester Plants - Consider proactively lowering operating rates, linking them to the sales-to-output ratio. If the ratio stays below 60% for consecutive days, reduce output by 5%-10% to prevent excessive inventory build-up. - Offer flexible sales policies such as price guarantees or deferred payment terms to large downstream customers to lock in some essential orders. - Monitor price fluctuations of raw materials PTA and MEG. If raw material prices also weaken, consider passing on some savings to stimulate restocking.