On July 13, the polyester filament yarn sector released a set of data worth pondering: the average production-sales rate of sample enterprises jumped from 35.5% to 54.0%, a single-day increase of 18.5 percentage points. At first glance, this figure seems like a signal of market recovery, but a deep dive into the specific data of 22 sample enterprises reveals that optimism still needs to be tempered.
Among the detailed production-sales rates published, only three enterprises exceeded 100% (150%, 130%, 100%), another four were in the 50%-90% range, while the remaining 15 enterprises hovered between 15% and 45%. This extremely polarized distribution indicates that the current market recovery is not broad-based but rather a localized volume increase achieved by individual enterprises through price or channel advantages.
Industrial Logic Behind Production-Sales Data
A 54.0% average production-sales rate is not high in normal years. Historical data shows that the healthy operating range for polyester filament yarn is typically 70%-80%; below 60% often indicates accumulating inventory pressure. The rebound from the low of 35.5% reflects more a correction of excessive pessimism than a substantial expansion of end-user demand.
Downstream user behavior confirms this judgment: rigid demand replenishment dominates, and willingness to build inventory remains cautious. After experiencing raw material price fluctuations in the second quarter, textile mills and weaving enterprises generally adopt a 'buy as needed' strategy to avoid capital tie-up from hoarding. This mentality manifests in the production-sales data as overall mediocrity with occasional bright spots.
The transmission of geopolitical risks to the cost side deserves attention. Continued tensions in the Middle East are pushing up crude oil price expectations, and as direct raw materials for polyester filament yarn, PTA and MEG's cost support is strengthening. Some polyester filament yarn factories have taken advantage of this to narrow the discount range for low-end negotiations, attempting to pass cost pressure downstream. However, whether downstream can accept depends on the recovery of end orders.
Escalating Game Between Price and Inventory
The current market is at a delicate balance: upstream costs are rising while downstream demand is waiting. Although inventory levels at polyester filament yarn factories have not yet reached the danger line, if the production-sales rate continues to stay below 60%, inventory pressure will rise significantly in the next two weeks. At that point, even with cost support, factories may be forced to offer discounts to offload goods.
From a product structure perspective, POY and FDY performed slightly better than DTY, which is related to the low operating rate of texturing enterprises. Some texturing mills have chosen to reduce production or shut down due to insufficient orders, suppressing demand for DTY. In contrast, POY and FDY are directly supplied to the weaving sector, where rigid demand replenishment provides relatively stable sales channels.
It is noteworthy that individual enterprises achieved production-sales rates as high as 150%, which typically means the enterprise either offered the market's lowest price or has stable long-term orders. In the context of overall industry weakness, this 'one standout' is unsustainable—low-price strategies compress profit margins, and the delivery of long-term orders will lower the average production-sales rate in subsequent months.