On July 24, the polyester filament yarn market sent a telling signal: the average sales-to-output ratio among sample enterprises stood at only 45.4%, a sharp drop of 9.8 percentage points from the previous day. Against a backdrop of persistently strong cost-side support, this figure suggests that downstream users did not follow through with purchasing as expected, but instead collectively slammed on the brakes.
Market Divergence Behind the Sales Data
A closer look at the sales-to-output ratios from 25 sample enterprises reveals a highly dispersed distribution: the lowest was 0%, while the highest reached 130%. Only four companies (16% of the total) recorded ratios above 100%, while as many as ten (40%) fell below 30%. This polarized pattern indicates that the market is not uniformly weak but is experiencing structural divergence—some companies, leveraging product advantages or customer loyalty, managed to maintain decent shipments, while the vast majority face severe inventory accumulation risks.
Further analysis shows that over 60% of the enterprises reported ratios below 50%, placing the entire industry in an awkward situation of "good reviews but poor sales." While upstream raw material prices continue to climb, making the cost-support logic appear robust, the actual capacity of end demand to absorb these costs falls far short of expectations.
Why the Cost Transmission Mechanism Fails
The direct driver of rising polyester filament yarn prices is the increase in upstream PTA and MEG costs. However, whether these price increases can be smoothly passed downstream depends on the order situation and profit margins of weaving mills. Currently, downstream weaving enterprises face two core contradictions: first, incremental demand from end-use garment orders is limited, especially with foreign trade orders remaining subdued due to high inflation and destocking cycles overseas; second, their own profit margins have been compressed to very low levels, making them extremely resistant to high-priced raw materials.
Most users are adopting a wait-and-see approach, with only a few making moderate replenishments. This behavior pattern reflects an extremely conservative procurement strategy of "procuring based on sales." They are no longer stockpiling based on price expectations but waiting for actual orders to materialize before purchasing raw materials. This strategic shift prevents upstream price signals from transmitting smoothly to the end market, as was the case in previous years.
Dual Pressure from Inventory and Cash Flow
The persistently low sales-to-output ratio directly leads to passive inventory accumulation among polyester filament yarn producers. The industry had experienced a rapid inventory destocking phase earlier, with some leading companies reporting doubled half-year results. However, the sales data since July suggests that the destocking process may have entered a bottleneck phase.
For small and medium-sized chemical fiber enterprises, funds tied up in inventory will significantly increase financial costs. If the sales-to-output ratio fails to recover above 60% within the next week, some companies may be forced to adopt price cuts or production curtailments for maintenance to alleviate pressure. This will further exacerbate market price volatility, creating a stalemate pattern of "upstream price support, downstream wait-and-see, and midstream pressure."
Implications for Procurement and Production Strategy
Under current market conditions, all segments of the supply chain need to reassess their risk exposure. For weaving mills, the risk of blindly chasing price increases and stockpiling is growing, while chemical fiber producers must be wary of an earlier-than-expected inventory peak.