In mid-July, the chemical fiber market showed clear signs of cooling transaction activity. According to publicly available industry data, the average sales-to-production ratio of polyester filament yarn sample enterprises on July 15 stood at 42.3%, a sharp drop of 24.7 percentage points from the previous trading day. This figure not only fell below the 50% threshold but also hit a one-month low, directly reflecting a sharp contraction in downstream purchasing willingness.
Signals Behind the Sales Data
Looking at the distribution of specific sales-to-production ratios that day, there was significant divergence among sample enterprises. Among about 20 sample companies, only one exceeded 100% (reaching 160%), a few managed to stay in the 60%-70% range, but the majority clustered at low levels between 20% and 40%, with even a 0% extreme case. This 'very few at the top, vast majority at the bottom' distribution pattern indicates that the overall market lacks effective demand support, relying only on promotions or special orders from individual companies to lift the average.
Downstream users generally adopted 'just-in-time procurement,' buying only the minimum needed to sustain short-term production, without actively building inventory. This spreading wait-and-see mentality is essentially a result of insufficient orders from terminal consumer markets like apparel and home textiles transmitting upstream. The textile industry typically has peak seasons in March-April and September-October, and July is a traditional off-season, but such a low sales ratio is still abnormal, suggesting that inventory pressure along the chain has squeezed back from the weaving stage to the chemical fiber raw material stage.
Upstream-Downstream Transmission and Price Expectations
Polyester filament yarn is a core intermediate in the polyester chain, and its sales ratio directly affects upstream PTA, MEG, and polyester chip operating rates and prices. When the sales ratio consistently falls below 60%, polyester plants typically face two choices: either cut production to ease inventory pressure, or lower prices to stimulate downstream restocking.
Historical experience suggests that a sharp drop in the sales ratio often foreshadows a possible loosening of spot polyester filament yarn prices in the short term. Following the July 15 data release, market skepticism about polyester plants' ability to maintain prices has intensified. If the sales ratio does not recover significantly in the following days, some plants may adopt a 'lower prices for volume' strategy, which would drag down the entire polyester chain's price center. For traders holding raw material inventory, this means floating loss risks are accumulating.
On the other hand, operating rates at downstream weaving mills are also under pressure. In major weaving clusters like Shengze, Changxing, and Xiaoshan, some small and medium mills have recently reduced operating rates or even halted production. The sluggish sales ratio further confirms weak terminal orders, and it is expected that before early August, weaving mills' procurement strategies will remain conservative, following a 'produce to order, buy as needed' model.
Practical Implications for Market Participants
This sales ratio data is not just a short-term market sentiment thermometer; it could become an important reference point for the second half of the year's chemical fiber price trend. Until there is a clear improvement in demand, the game across the chain will revolve around 'inventory costs' and 'cash flow.'
For Buyers - It is recommended to compress regular raw material inventory to 7-10 days to avoid passive losses during a price downtrend. - Closely track price adjustment dynamics at polyester plants, focusing on the price reduction window after the sales ratio falls below 50% for three consecutive days. - Sign short-term floating price contracts with suppliers, locking in processing fees rather than absolute raw material prices to hedge against volatility risks.
For Polyester Plants - Prioritize production cuts over price reductions to balance supply and demand, preventing a vicious price war that erodes industry profits. - Implement differentiated rebate policies for major downstream customers, encouraging phased pickups under a 'lock volume, not price' model. - Use futures instruments to hedge PTA and polyester filament yarn inventory, managing price mismatch risks between raw materials and finished products.
Overall, the July 15 sales data serves as a wake-up call for the chemical fiber industry. With terminal consumption recovery uncertain, all chain participants need to reassess their inventory strategies and risk exposures. The Texworld editorial team will continue to track subsequent sales changes and polyester plant responses.