Behind the Brief Polyester Sales Surge: Upstream-Downstream Game Enters a New Phase of Cost Transparency

On July 6, a polyester factory promotion pushed the average sales-to-production ratio for sampled polyester filament yarn enterprises to 153.8%, triggering modest downstream replenishment. Yet this figure masks deeper contradictions along the chain: international oil prices have retreated to pre-Spring Festival levels, customers are demanding price cuts, and textile mills face a tough choice between maintaining output and reducing production.

The 'One-Way Valve' of Cost Transmission

Crude oil, as the upstream benchmark for the polyester chain, has transmitted its weakness quickly to downstream price expectations. Buyers are demanding equivalent fabric price cuts based on oil declines, but mills have a different perspective. During the previous raw material surge, fabric prices rose only partially—mills absorbed a significant share to maintain customer relationships, squeezing margins to tissue-paper thinness.

Now that oil has fallen, customers demand 'proportional' reductions, yet polyester plants are acting cautiously. Industry data shows they are not slashing list prices but offering limited-time promotions with modest discounts. The strategy is clear: prefer lower operating rates (currently around 70%) to protect unit margins of about 500 yuan per ton, rather than boosting volume at 100 yuan per ton—especially given that existing inventory was produced with higher-cost raw materials. A fire sale would lock in losses.

A deeper driver is that polyester plants have tasted the benefits of 'anti-involution.' After years of ruinous price wars, the industry now prioritizes price discipline over market share.

Weavers: Price Cuts Fuel Wait-and-See

The polyester price reduction did not trigger a demand surge. The latest promotion achieved over 100% sales-to-production, but the prior one managed only 70%. Market confidence is brittle—price easing reinforces expectations of further declines. National Bureau of Statistics data shows capacity utilization in textiles declined sequentially at the end of Q2, with weaver operating rates generally low and actual raw material demand limited.

July is traditionally the season for stocking autumn/winter fabrics, but this year is different. Last year's severe output cuts stemmed from overproduction and inventory buildup; this year, weavers are traumatized by raw material volatility. With few orders and costs swinging wildly, any increase in production carries significant inventory devaluation risk.

Second Half: A Capacity Bet on Future Markets

The market is in its deepest seasonal lull, with order books thin. Yet mills cannot completely ignore second-half preparation. Industry analysis sketches two scenarios:

• Optimistic: Demand recovers in H2, low inventories trigger a turnaround, fabric prices rise temporarily, and existing stock becomes a quick asset.
• Pessimistic: Fabric prices stay flat or fall further, and every meter produced now deepens H2 losses.

For many weavers, capacity decisions over the next two months are essentially a gamble—betting that the products they make today will become market hits tomorrow. This uncertainty is reshaping inventory strategies and procurement rhythms across the chain.

Practical Recommendations

For Buyers - Monitor the correlation between polyester promotion cycles and crude oil prices. Avoid bulk chasing at the first sign of a price cut; instead, replenish in batches after market sentiment stabilizes. - Establish transparent cost-sharing mechanisms with suppliers, linking raw material costs to fabric pricing formulas, to reduce friction from across-the-board price demands.

For Mills - Limit autumn/winter fabric stocking to confirmed orders, avoiding speculative expansion. Maintain operating rates around 70% to preserve flexibility. - Use the current lull to optimize product mix—shift from high-volume commodities to small-batch, differentiated varieties to reduce homogeneous inventory risk.