42.9%—that was the average sales-to-output ratio for sampled polyester filament yarn enterprises on July 7. Down 29 percentage points from the previous trading day, the figure represents a near-halving. Behind this number lies a collective 'lie-flat' attitude among downstream weaving, texturing, and other sectors.
Data Deep Dive: A Tale of Two Extremes
Breaking down the public data from 23 sampled firms reveals stark divergence. Only two companies achieved a sales ratio above 100%—200% and 80%, likely driven by one-off discount promotions. Of the remaining 21, just five recorded ratios between 40% and 60%, while 16—nearly 70%—fell below 40%. The lowest readings of 10% and 16% mean those firms sold less than one-fifth of their daily output.
This structural weakness is no accident. The polyester filament market has been under pressure since late June, and the sudden sales plunge in early July appears to be the culmination of accumulated tensions. Industry data shows that inventory levels at most polyester plants are rising rapidly, with some POY and FDY specifications approaching 15–20 days—well above normal turnover cycles.
Why Has Downstream Buying Gone Silent?
The direct cause of the sales ratio crash is weak buying sentiment among downstream users. But a deeper look reveals at least three layers of pressure:
- Insufficient end-order demand: Weaving mills report a noticeable month-on-month decline in new orders since June, especially for export orders, as overseas destocking progresses slowly. Operating rates in major weaving hubs like Shengze and Changxing have dropped from above 75% in May to around 65%.
- Blocked cost transmission: Although upstream PTA and MEG prices have softened slightly, polyester filament producers have limited room to offer discounts. Under a 'buy on rising, not falling' mentality, downstream buyers prefer to wait for lower prices.
- Tight cash flow: At mid-year, weaving mills face loan repayments and wage pressures, further constraining their willingness to stock up on raw materials.
Industry Impact: From Destocking to Capacity Reduction?
Persistently low sales ratios directly lead to inventory buildup at polyester plants. When stock exceeds safety thresholds, factories may be forced to adopt more aggressive price cuts or even implement partial production cuts. This is not alarmist—in the same period of 2023, a similar drop below 40% triggered concentrated maintenance shutdowns to support prices.
For upstream PTA and MEG, weaker polyester filament demand means lower offtake, further suppressing feedstock prices. At the downstream weaving level, if orders fail to improve, operating rates may continue to decline, creating a negative spiral: weak demand → poor sales → high inventory → price cuts/production cuts → falling raw materials → even more cautious buying.