On July 10, the average sales-to-production ratio of polyester filament yarn sample enterprises plummeted to 35.5%, down 4.9 percentage points from the previous trading day. This means that for every 100 tons of polyester filament yarn produced, fewer than 36 tons were purchased by downstream customers, leaving over 64 tons accumulated in factory warehouses. Against the backdrop of unfulfilled seasonal demand expectations, this data has poured cold water on the market.
Background
The sales-to-production ratio of polyester filament yarn is a core indicator of chemical fiber market activity. The 35.5% ratio not only falls far below the industry normal level (typically 70%-80%) but also lags behind the Q2 2024 average. China Customs data shows that cumulative exports of polyester filament yarn grew about 8% year-on-year in H1 2024, but domestic sales have been dragged down by sluggish recovery in end-use apparel consumption.
From the specific sample data, the distribution is extremely uneven: some enterprises reported a 0% ratio, meaning zero transactions for the entire day, while the highest reached 70%. This extreme divergence indicates that the market is not completely stalled but that demand is highly concentrated among a few suppliers with price advantages or strong client relationships. Industry public data shows that downstream weaving enterprises, after concentrated replenishment last week, have generally chosen to wait on the sidelines for clearer raw material price signals.
The sharp drop in the sales-to-production ratio is the result of multiple intertwined factors. Upstream PTA and MEG prices have been oscillating in a narrow range recently, failing to provide clear directional guidance for polyester filament yarn. Meanwhile, overseas orders for textile end-products have slowed significantly due to weak demand in European and American markets and trade barriers in some countries. National Bureau of Statistics data shows that the textile industry's value-added industrial output growth rate fell back to 3.2% in June, confirming insufficient operating rates downstream.
Industry Impact
The sluggish sales-to-production ratio of polyester filament yarn directly impacts the cash flow and inventory management of chemical fiber enterprises. A 35.5% ratio means inventory turnover days will be significantly extended, putting pressure on companies to passively accumulate stock. For small and medium-sized chemical fiber plants with already tight cash flows, this may force them to cut prices to destock, further squeezing already thin profit margins. Related categories such as polyester chips and polyester staple fiber may also be dragged down by the spread of pessimistic market sentiment.
Secondly, this data sends a clear expectation of cost reduction downstream to the weaving and dyeing sectors. If polyester filament yarn prices come under pressure in the short term, the raw material procurement costs for fabric mills and garment factories will decrease accordingly. However, downstream enterprises are generally maintaining low inventory strategies, waiting for lower prices to enter the market. This 'buy on rising, not on falling' psychology actually exacerbates the short-term market stagnation.
From a regional industrial cluster perspective, traders and factories in major polyester filament yarn producing areas such as Xiaoshan and Shaoxing in Zhejiang, and Shengze in Jiangsu, report a noticeable decrease in inquiry calls. Some factories have begun to proactively reduce production or undergo equipment maintenance to control inventory. This 'production cut to protect prices' behavior, if sustained, will lead to a further decline in the operating rate of the chemical fiber industry, forming a cycle of 'low sales-production ratio—production cut—reduced supply—price stabilization'.