On July 17, the average production-sales rate of polyester filament sample enterprises stood at only 33.0%, down 0.1 percentage point from the previous trading day. This is not a one-day fluctuation but a continuation of a multi-day low trend. According to industry data, the sales data for the day were mostly clustered in the 20%-40% range, with some enterprises reporting zero transactions. This indicates that the purchasing sentiment of downstream weaving and texturing enterprises has dropped to a freezing point.
Why the production-sales rate remains sluggish
The production-sales rate, defined as the ratio of daily sales to daily output, is a key indicator of inventory digestion speed for chemical fiber enterprises. A rate of 33.0% means that for every 100 tons of polyester filament produced, only 33 tons are absorbed by the market, leaving 67 tons as inventory. Historically, when the rate falls below 50% for consecutive days, the industry typically enters an inventory accumulation cycle. The current level is well below the warning line.
Looking at the specific sample enterprises, the data distribution was extremely dispersed but overall weak: the highest rate was only 60%, while the lowest was zero. Among the 24 sample enterprises, 13 had rates at or below 20%, accounting for more than half. This pattern suggests that the issue is not confined to individual enterprises but reflects an industry-wide demand contraction.
Why downstream buying sentiment is weak
Sluggish demand is the direct cause of the declining production-sales rate. From an industrial chain perspective, the main downstream of polyester filament is the weaving sector, which ultimately supplies apparel and home textiles. Currently, the terminal apparel market is in a traditional off-season, with summer orders winding down and autumn/winter orders yet to ramp up. As a result, weaving enterprises are operating at generally low utilization rates, limiting their rigid demand for raw materials.
More critically, from a price expectation standpoint, downstream users remain cautious about the market outlook. Polyester filament prices have lacked a clear direction recently, with neither strong cost-side support nor explosive demand-side pull. Under the 'buy on rising, avoid on falling' mentality, weaving enterprises prefer to maintain low inventory rather than stockpile during a price stalemate. This sentiment further reinforces the low production-sales rate.
Inventory pressure transmits upstream
A production-sales rate persistently below 40% means that polyester filament producers are rapidly accumulating inventory. According to industry experience, when inventory days exceed 20, enterprises typically face significant capital occupation and storage pressure, which may lead to price promotions or production cuts to alleviate the burden.
Currently, polyester plants are still operating at high utilization rates, but the divergence between production and sales is widening the supply-demand gap. If this trend cannot be reversed in the next one to two weeks, some enterprises may be forced to reduce operating rates. This would indirectly drag down demand for upstream PTA and ethylene glycol, triggering a chain reaction across the industry.
Implications for buyers and foreign trade enterprises
In the current market environment, all segments of the chain need to reassess their inventory strategies and procurement pace.
For buyers - Maintain a low-inventory strategy and purchase on demand to avoid bulk stockpiling during a price stalemate, thereby mitigating inventory depreciation risks. - Monitor polyester plants' maintenance plans or promotional policies. If the production-sales rate remains sluggish, there may be opportunities for price concessions at month-end. - Establish flexible pricing mechanisms with suppliers, such as 'point pricing' or 'average price' settlement, to lock in relatively favorable procurement costs.
For foreign trade enterprises - Keep an eye on the start of overseas orders, especially replenishment orders for autumn/winter fabrics from European and American markets, and prepare raw material locks in advance. - Be vigilant about the impact of exchange rate fluctuations on export costs. In the context of two-way RMB volatility, use forward settlement and other hedging tools in a timely manner. - Take advantage of the current relatively stable domestic raw material price window to negotiate long-term orders with overseas clients, aiming to lock in supply contracts for the next 3-6 months at current prices.
In summary, the polyester filament market is in a typical 'demand vacuum period.' The low production-sales rate is the combined result of downstream sentiment and industrial chain rhythm. In the short term, the market lacks upward momentum but may not experience a sharp decline either. For industry participants, the most important thing now is patience and flexible response, rather than blindly betting on direction.