On July 7, trading in the polyester filament yarn market suddenly cooled. Industry data shows that the average sales-to-production ratio of sampled enterprises stood at only 42.9%, a staggering 29-percentage-point decline from the previous trading day's close. This figure not only marks a one-month low but also means that over half of the day's production capacity failed to convert into effective orders.
When the sales-to-production ratio falls below 50%, the industry typically enters an active destocking phase. The 42.9% reading, combined with descriptions of "weak buying sentiment" among downstream users, points to a more severe reality: weaving mills' willingness to absorb raw materials has frozen, and inventory pressure across the chemical fiber chain is rapidly accumulating upstream.
Micro-Level Divergence Behind the Data
Looking at the specific sales data from 23 sampled enterprises on that day, the market shows a clear "fire and ice" pattern. The vast majority of enterprises reported ratios between 20% and 45%, with as many as five firms at 20% or below—the lowest being just 10%. The few that achieved 60% or even 80% almost all adopted a "profit-sacrificing sales" strategy, cutting prices in exchange for cash flow.
Only one enterprise hit 200%, likely fulfilling deferred orders or a major customer's bulk replenishment—an outlier with no trend significance. Overall, the market lacks spontaneous buying support, with traders and weaving mills on the sidelines, waiting for further price declines.
The Overlapping Effect of Cost Transmission and Demand Collapse
The cliff-like drop in the sales-to-production ratio is not an isolated event. Upstream, recent volatility and weakness in PTA and MEG prices have weakened cost support for polyester filament yarn, fostering a "buy on rising, not on falling" psychology downstream. On the demand side, end-use textile and apparel orders have entered the traditional off-season, with gray fabric sales slowing and weaving mill operating rates declining from their mid-June peaks.
More critically, trader inventories remain high. According to industry data, social inventories of polyester filament yarn in the Jiangsu-Zhejiang region have accumulated for three consecutive weeks, straining the cash flow of some small and medium traders and forcing them to suspend purchases. This negative feedback loop—"upstream price cuts → downstream wait-and-see → inventory buildup"—is forming a self-reinforcing downward spiral.
Regional Transmission and Production Decisions
In core production areas such as Shengze, Changxing, and Xiaoshan, enterprise operating rates have not been adjusted downward simultaneously. This is because most leading companies still have normal raw material procurement cycles, and some have yet to digest previously signed forward contracts. However, if the sales-to-production ratio remains below 50% for more than a week, companies will face two choices: continue cutting prices to destock, or proactively reduce production.
Historical experience suggests that when the ratio falls below 40% for three consecutive days, leading companies typically activate a "production cut to support prices" mechanism. Currently, there is a buffer of 2.9 percentage points before that threshold, but given the difficulty of a rapid demand recovery in the traditional July off-season, the window for production cuts is narrowing.