On July 7, the sales-to-production ratio of polyester filament yarn in the sample enterprises poured cold water on the industry. The average ratio was only 42.9%, a sharp drop of 29 percentage points from the previous trading day's close. What does this number mean? It means that for every 100 tons of polyester filament produced that day, more than 57 tons failed to be converted into actual sales, and inventory pressure is rapidly accumulating.
A Cliff-Like Decline: Market Sentiment Behind the Data
Looking at the specific data, among the 23 sample enterprises, the highest sales-to-production ratio reached 200%, but more than half of the enterprises had a ratio below 40%, with the lowest at only 10%. This extreme divergence indicates that not all enterprises face the same situation. The enterprise with a 200% ratio likely exchanged short-term orders for price discounts, while the majority fell into the awkward position of 'no one is interested.'
Low buying sentiment among downstream users is the direct cause of this sharp decline. From the perspective of industrial chain transmission, terminal weaving enterprises are generally facing insufficient orders and inventory backlogs. They are reluctant to stockpile and even less willing to chase price increases, only purchasing on demand. This 'short and fast' procurement strategy directly leads to sluggish transactions in the polyester filament market.
Dual Squeeze from Costs and Demand
Polyester filament prices are currently in a delicate balance. Fluctuations in upstream raw material prices, such as PTA and ethylene glycol, are not significant, and the cost side has not provided clear upward or downward momentum for polyester filament prices. However, the problem lies in the demand side being weaker than expected.
July is traditionally the off-season for the textile industry, but this year's off-season effect seems more pronounced. On the one hand, overseas orders are recovering slowly due to the global economic slowdown; on the other hand, the domestic consumer market, although recovering, is not strong enough to support large-scale replenishment by weaving enterprises. With both supply and demand weak, the polyester filament market lacks directional momentum.
It is worth noting that individual enterprises choose to offer discounts to move goods. Although this strategy balances production and sales in the short term, if competitors follow suit, it may trigger a price war, further compressing industry profit margins.
Inventory Pressure and Price Expectations
A sales-to-production ratio persistently below 100% means inventories will continue to increase. Based on the data from July 7, if the ratio cannot rebound to the equilibrium point in the following days, the inventory days of polyester filament enterprises may quickly rise from the current 10-15 days to over 20 days. When inventories are high, enterprises often face two choices: either reduce prices to clear inventory or cut production to protect profits.
From historical experience, when the sales-to-production ratio remains below 50% for several consecutive days, the probability of production cuts increases significantly. Currently, some polyester plants have begun planning to reduce operating rates, which may become a major market variable in the coming weeks. If production cuts are implemented, they will help alleviate supply pressure and provide some support for prices. However, if production cuts fall short of expectations, the downside risk for prices will increase.