The July 17 production-sales data sent a chill through the chemical fiber industry: the average sales rate for polyester filament yarn (POY) sample enterprises was only 33%, down 0.1 percentage point from the previous day. This means that for every 100 tons of polyester filament yarn produced, 67 tons remain stuck in warehouses, unable to convert into cash flow. Market transactions are sluggish, buyer sentiment is weak, and sales are flat—such descriptions have appeared repeatedly in recent industry daily reports, but the 33% sales rate has touched a low-level warning line in recent years. From publicly available data, the sales rate distribution is highly uneven, with the lowest enterprise recording 0% and the highest only 60%, with most concentrated in the 20-30% range.
Demand Side: Terminal Weaving 'Indigestion'
Polyester filament yarn is a core intermediate raw material in the textile industry chain, and its sales rate directly reflects the operating willingness and order status of downstream weaving enterprises. A 33% sales rate means weaving factories are basically purchasing only on demand, or even digesting existing inventory, rather than actively restocking. This 'lying flat' purchasing behavior stems from shrinking orders in the terminal apparel and home textile markets. Domestic apparel retail sales growth has slowed in the first half of the year, while export orders have fallen significantly due to overseas destocking. Gray fabric inventories in the weaving sector are also high, with operating rates generally insufficient, naturally suppressing demand for polyester filament yarn. Industry public data shows that the operating rate of major weaving clusters in Jiangsu and Zhejiang has fallen from a peak in April to around 60%, with some small and medium-sized weaving factories dropping to below 50%.
Supply Side: High Operating Rates vs. Low Sales
In contrast to the sluggish demand side, polyester filament yarn factories have not significantly reduced operating rates. Upstream polyester plants, supported by relatively firm prices for raw materials PTA and ethylene glycol, continue to operate at high loads. This combination of 'high operating rates, low sales' directly leads to rapid inventory accumulation. From the perspective of industrial cluster reactions, factories in major POY production areas such as Shengze, Changxing, and Xiaoshan are facing increasing shipment pressure. Some enterprises have already begun to adopt profit-sacrificing promotional strategies, attempting to stimulate downstream purchases through price cuts. However, historical experience shows that when the sales rate remains below 40%, price cuts are often ineffective in boosting demand and may instead trigger expectations of further price declines, leading downstream to adopt a more wait-and-see attitude.
Price Outlook: Downside Risks Are Accumulating
The current sales rate data is crucial for decision-making by both buyers and factories. For POY factories, inventory pressure means capital occupation and rising financial costs, and they are likely to increase promotional efforts in the coming weeks, potentially triggering a 'price war.' For downstream weaving enterprises, although current raw material prices are relatively low, the 33% sales rate indicates the market has not yet bottomed out, and the risk of blindly bottom-fishing and stockpiling cannot be ignored. From a broader perspective, the inventory cycle of the chemical fiber industry is shifting from 'passive accumulation' to 'active destocking.' This phase is usually accompanied by price declines and margin compression, potentially lasting 2-3 months. Foreign trade enterprises should pay particular attention to the replenishment cycle of overseas markets. If European and American retailers start ordering for Christmas before the fourth quarter, it could bring a wave of demand recovery.