The sales data on July 10 threw a bucket of cold water on the chemical fiber market. The average sales-to-output ratio of polyester filament yarn sample enterprises was only 35.5%, down 4.9 percentage points from the previous trading day, meaning more than 60% of production capacity failed to convert into actual sales that day. According to industry public data, this level is approaching the low point seen in mid-March this year, reflecting a phase of weak downstream demand.
Event Background
The direct cause of this sharp drop in the sales-to-output ratio was the collective retreat of downstream users after concentrated replenishment. Looking at the specific data of sample enterprises, only one of the 21 companies achieved a ratio of 70%, while all others were below 40%, and one even reported zero sales for the day. This extreme divergence suggests that the earlier inventory replenishment was more driven by rigid demand rather than a recovery in market confidence.
It is worth noting that this phenomenon is not isolated. Reviewing similar data from July 6 to 8, the ratio hovered around 40% and showed a daily downward trend. As a core variety in the chemical fiber industry chain, fluctuations in polyester filament yarn sales directly affect demand expectations for upstream raw materials such as PTA and MEG. Currently, the raw material inventory of downstream weaving enterprises is generally maintained at 7-10 days, with extremely low willingness to replenish, further confirming the shortage of terminal orders.
Industry Impact
The transmission effect of the low sales-to-output ratio on various links of the industry chain is becoming apparent. For upstream polyester factories, inventory pressure is accumulating. According to industry practice, a sales-to-output ratio below 50% means inventory accumulation. If this state persists for more than a week, some factories may be forced to reduce or even halt production. In fact, some small and medium-sized polyester plants in the Jiangsu and Zhejiang regions have begun to adjust operating rates by 5%-10%.
For downstream weaving enterprises, current raw material prices remain relatively high. The quotes for the three major varieties of polyester filament yarn—POY, FDY, and DTY—are basically flat compared with the end of June. Without significant improvement in terminal orders, buyers generally adopt a "buy-as-needed" strategy to avoid capital occupation. This wait-and-see sentiment is spreading to the further downstream sectors of apparel and home textiles, ultimately potentially suppressing the entire pre-season stocking pace.
From a broader perspective, the sluggishness in the chemical fiber market is closely related to the pace of macroeconomic recovery. According to data from the National Bureau of Statistics, the year-on-year growth rate of the textile industry's industrial added value in June slowed compared with May, and export delivery values also declined month-on-month. On the external demand side, high inventories and consumption downgrading in European and American markets continue, and the effect of order diversion to Southeast Asia has not faded. These factors together constitute the demand dilemma currently facing the chemical fiber industry.
Practical Recommendations
For Purchasers - Current raw material procurement should be based on meeting short-term production needs. It is recommended to control inventory days to 5-7 to avoid losses from price fluctuations. - Closely monitor changes in polyester factory operating rates. If large-scale production cuts occur, raw material prices may bottom out and rebound, at which point appropriate replenishment can be considered. - Negotiate flexible supply contracts with suppliers to secure more favorable settlement terms during price downturns.
For Mills (Polyester and Weaving Enterprises) - Polyester filament yarn factories should prioritize clearing existing inventories, accelerating capital recovery through promotional pricing or bundled sales to avoid stockpiling. - Weaving enterprises can take advantage of the current stable raw material prices to optimize product structures, shifting toward high value-added differentiated fabrics to enhance profit margins. - Both sides should strengthen production-sales coordination, using digital tools to track orders and inventory data in real time, dynamically adjusting production plans to avoid blind expansion.
Overall, the chemical fiber market is experiencing a typical "post-replenishment syndrome." Before terminal demand truly recovers, all links in the industry chain need to maintain sufficient patience and flexibility. The next two weeks will be a key observation window. If downstream orders still show no improvement, the industry may face a deeper adjustment.