On July 17, the average production-sales ratio of polyester filament yarn sample enterprises was only 33.0%, down 0.1 percentage point from the previous trading day. This seemingly stable figure is actually a microcosm of weak demand in the chemical fiber industry.
Deep Signals from Low Production-Sales Ratio
A 33.0% production-sales ratio means that for every 100 tons of polyester filament yarn produced that day, only about 33 tons were absorbed by the market, with the remaining 67 tons turning into inventory. More notably, the distribution of production-sales data among sample enterprises is extremely uneven: the highest value is only 60%, while the lowest is 0%, with most enterprises concentrated in the narrow 20%-35% range. This distribution pattern indicates that downstream weaving enterprises not only have a generally low willingness to purchase but also exhibit obvious wait-and-see behavior, only replenishing stocks when prices or product specifications are highly matched.
Historically, a production-sales ratio below 40% is considered a signal of a market entering a "winter." The current 33.0% level has been hovering at a low point for several consecutive days, about 10-15 percentage points lower than the same period last year. This means that the social inventory of polyester filament yarn is rapidly accumulating, putting significant downward pressure on future prices.
Upstream-Downstream Transmission: From Weak End Demand to Stagnant Raw Material Sales
The fundamental reason for the persistently low production-sales ratio of polyester filament yarn lies in the weaker-than-expected recovery of end-user demand for textiles and apparel. In the first half of 2024, although China's textile and apparel exports maintained growth, the pace slowed significantly, and the domestic market performed mediocrely. Downstream weaving enterprises generally face insufficient orders and high finished product inventories, naturally making them cautious about purchasing raw materials.
Meanwhile, upstream raw material prices such as PTA and ethylene glycol have fluctuated sharply recently, increasing cost uncertainty. This further suppresses the pricing ability of polyester filament yarn producers and the purchasing enthusiasm of downstream buyers. Although polyester filament yarn prices have retreated recently, downstream players believe there is still room for decline, exacerbating the "buy when prices rise, not when they fall" mentality, pushing the market into a negative spiral of "the more it falls, the less people buy."
From a regional industrial belt perspective, major polyester filament yarn consumption areas such as Shengze, Changxing, and Xiaoshan have seen weaving machine operating rates generally decline to 60%-70%, with some small and medium-sized enterprises even dropping below 50%. Lower operating rates directly reduce raw material consumption, and weaving enterprises themselves are accelerating destocking, naturally shrinking their purchases of polyester filament yarn.
Industry Response: Output Reduction and Structural Transformation
Faced with persistently low production-sales ratios, some leading polyester filament yarn companies have begun to proactively reduce output. According to industry public data, since mid-July, the overall operating rate of China's polyester filament yarn industry has been lowered from over 90% to around 85%, with some small and medium-sized enterprises even dropping below 70%. While production cuts help alleviate inventory pressure, they are unlikely to reverse the supply-demand imbalance in the short term.
More noteworthy is the change in product structure. While conventional varieties are sluggish, the production-sales ratio for differentiated and functional polyester filament yarn (such as cationic dyeable, moisture-wicking, and flame-retardant types) is relatively better, with some enterprises achieving over 50%. This indicates that downstream demand is not entirely absent but is shifting toward high-value-added, differentiated products. For polyester filament yarn companies, accelerating product structure adjustment and increasing the differentiation rate have become key strategies to cope with market weakness.
Future Outlook: Continued Pressure in Q3
Looking ahead to the third quarter, the polyester filament yarn market still faces multiple pressures. On one hand, the traditional off-season combined with weak end-consumer confidence makes it difficult for downstream replenishment willingness to recover quickly. On the other hand, new production capacity continues to be released, which may further intensify the supply-demand contradiction. The production-sales ratio is expected to fluctuate in the 30%-40% range, with the price center likely to continue moving downward.
However, potential policy-level positives should also be noted. The recent national policies to promote consumption and stabilize foreign trade, if gradually implemented in the third quarter, could provide some support for end-user textile and apparel demand. Additionally, as high temperatures subside, autumn orders are expected to start gradually from late August to September, which may lead to a phased recovery in the production-sales ratio.