On July 10, the average sales-to-production ratio of polyester filament yarn sample enterprises fell to 35.5%, a sharp drop of 4.9 percentage points from the previous trading day. This figure is not only below the industry-recognized breakeven line of 50%, but also means that more than 60% of capacity has failed to translate into effective sales. After a concentrated replenishment in the previous period, downstream users quickly withdrew, pushing market transactions into a deep freeze.
Signals Behind the Data
Behind the 35.5% average lies a more structural problem: among the 21 sample enterprises, seven had a ratio of only 20%, and one even recorded zero. Only one enterprise achieved 70%, while the rest hovered between 30% and 40%. This extreme divergence indicates that not all companies face the same plight; some have already entered a vicious cycle of inventory accumulation and capital turnover constraints.
The sales-to-production ratio is a core leading indicator for measuring supply and demand in the chemical fiber market. When this indicator remains below 40%, it typically signals downward price pressure on polyester filament yarn within the next one to two weeks. Even if upstream raw material costs for PTA and ethylene glycol remain stable, the demand collapse at the filament end will force price cuts to destock. For weaving mills, this means the procurement window is narrowing—the longer they wait, the lower the potential restocking cost, but the risk of stockouts is also rising.
Upstream-Downstream Transmission and Price Expectations
The sharp drop in polyester filament yarn sales is not an isolated event but a microcosm of demand weakness across the entire chemical fiber supply chain. Since July, operating rates at downstream weaving mills have generally remained below 60%, with some small and medium-sized mills in the Jiangsu-Zhejiang region even dropping to 50%. Terminal garment export orders, affected by high overseas inflation and destocking cycles, have not shown the usual "summer-autumn stocking" pattern seen in previous years.
On the cost side, crude oil prices have been fluctuating in the $70-75 per barrel range, while PX and PTA prices remain relatively firm. However, polyester filament yarn prices have begun to soften. This pattern of "flat raw material prices, weakening finished product prices" is squeezing processing margins for polyester plants. Industry public data shows that cash flow profits for POY and FDY products have narrowed by about 200 yuan per ton compared to the peak in June. If the sales ratio fails to recover above 50% within the next week, polyester plants may initiate production cuts to support prices.
It is worth noting that sales data for July 8 and July 7 were also at low levels, indicating that this demand weakness is persistent rather than a one-day fluctuation. The market is shifting from "buying on rising prices" to "refusing to buy on falling prices," creating a negative feedback loop.
Inventory Strategy and Supply Chain Risks
For downstream weaving and texturizing mills, the current market environment presents both challenges and opportunities. On one hand, the downward trend in polyester filament yarn prices allows for lower raw material costs through delayed procurement. On the other hand, if polyester plants initiate large-scale production cuts, certain specifications—especially fine denier and high filament count varieties—may face temporary shortages.
From a regional industrial cluster perspective, weaving mills in major polyester filament yarn producing areas such as Shengze, Changxing, and Xiaoshan are generally adopting a "procure on demand, zero inventory" strategy. This approach effectively avoids inventory depreciation risk during a price downturn, but it can also leave them vulnerable when prices rebound. The market cycle in November 2022 demonstrated that when the sales ratio rapidly recovers from below 30% to above 80%, prices can rise by 500-800 yuan per ton within two weeks.