Polyester Filament Sales Plunge 30% in Early July: Weaving Sector’s Appetite Hits Rock Bottom

On July 7, the average sales-to-production ratio of polyester filament yarn among sample enterprises fell to 42.9%, a sharp drop of 29 percentage points from the previous trading day. This is the largest single-day decline in the past month. Downstream buying sentiment hit a low, with transactions mainly consisting of small-lot urgent orders. Only a few companies managed to achieve balanced sales by offering discounts. This sales slump is not an isolated event but a concentrated reflection of weak terminal demand transmitting upstream. As we enter July, weaving mills are generally facing a shortage of orders, with finished product inventories piling up, forcing factories to reduce operating rates and curb purchasing intentions. When the weaving sector stops buying on price increases, polyester filament sales lose their most important support. Looking at the sales data from 23 sample enterprises released that day, more than 70% reported sales-to-production ratios below 50%, with many clustering in the 20% to 40% range and the lowest at only 10%. Only a few companies pushed their ratio to 200% by offering price discounts, but this 'volume-for-price' model is unsustainable and will further squeeze industry profit margins. A ratio below 50% means that more than half of the day's output turns into inventory. If this trend continues, social inventories of polyester filament will accumulate rapidly in the short term, putting downward pressure on prices. Although raw material prices such as PTA and MEG remain high, the support from the cost side is being gradually eroded by weak demand. Major weaving clusters such as Shengze, Changxing, and Xiaoshan-Shaoxing have generally reduced operating rates in recent weeks. According to industry public data, the comprehensive operating rate of water-jet looms in the Jiangsu-Zhejiang region has fallen by 3-5 percentage points compared with late June. Some small and medium-sized enterprises have even scheduled early summer shutdowns due to a lack of orders. The cautious sentiment in weaving is spreading to texturing and chip segments. The foreign trade side is also not optimistic. The destocking process in European and American markets is slow, and the effect of order diversion to Southeast Asia persists. The traditional off-season in July, coupled with volatile shipping rates, has pushed the order-taking willingness of export-oriented weaving mills to a low for the year. On the domestic front, the pace of stock preparation for home textiles and apparel fabrics has slowed significantly, and market expectations for the 'golden September and silver October' have shifted from optimism to wait-and-see. Although polyester filament prices have begun to soften, the cost side has not moved down simultaneously. PX and PTA remain elevated due to overseas refinery maintenance and blending demand. Polyester plants are caught in a pincer between high costs and weak demand, with profit margins squeezed to near breakeven levels. Some companies have chosen to cut production to support prices, but it is difficult to reverse the supply-demand imbalance in the short term. Notably, the increased concentration in the industry gives leading companies more pricing power. If the sales ratio continues to stay below 50%, leading companies may resort to joint production cuts to stabilize market expectations. However, whether this strategy works depends crucially on the pace of terminal demand recovery. For buyers, the current polyester filament price is in a downward channel, but cost support limits the potential for a sharp decline. It is recommended to adopt a 'small batch, multiple frequency' procurement approach to avoid large one-time stockpiles at high prices. Pay close attention to operating rate changes in major production areas such as Shengze and Changxing. If operating rates fall further, consider accelerating replenishment to avoid subsequent supply tightness. Sign short-term price protection agreements with suppliers to lock in some low-cost sources and reduce the risk of price fluctuations. For foreign trade companies, the recovery of European and American orders will take time. It is recommended to shift the focus of order-taking to emerging markets such as the Middle East and Africa, where demand for conventional polyester fabrics is relatively stable. Use the current window of domestic raw material price corrections to negotiate long-term fixed-price contracts with overseas clients, locking in profit margins in advance. Pay attention to fluctuations in the RMB exchange rate and shipping costs, and add exchange rate floating mechanisms and freight sharing clauses in contract terms to hedge against uncertainties.