Polyester Filament Yarn Sales Rate Plunges to 25%: Industry Faces Cost-Demand Squeeze

On July 27, the average sales-to-production ratio of polyester filament yarn sample enterprises plummeted to 25.4%, a 20-percentage-point drop from the previous day. This means that for every 100 tons produced, only about 25 tons were sold, with the rest added to inventory. Industry data shows ratios ranged from 0% to 40%, with most firms at 15%-30% and some reporting zero transactions.

Cost Collapse Meets Demand Void

The root cause is a sharp decline in polymerization costs following signs of easing geopolitical tensions. International crude oil and polyester raw material prices fell rapidly, eroding cost support for polyester filament yarn. Downstream weaving mills turned cautious, slowing procurement and leaving market sentiment subdued with few actual trades.

This signals a shift from a cost-driven to a demand-deficient market. In the past six months, polyester filament yarn prices rose mainly due to raw material cost increases, but terminal textile and apparel orders did not recover in tandem. Once the cost side weakened, downstream quickly switched to destocking mode, as reflected in the sharp drop in sales ratio.

Chain Reaction: From Polyester to Fabric to Apparel

The low sales ratio will transmit both upstream and downstream along the chain:

• Upstream: Demand expectations for polyester chips, PTA, and MEG may weaken, further depressing raw material prices and creating a negative feedback loop.
• Downstream: Weaving mill operating rates may decline as raw material procurement shrinks, putting gray fabric markets under dual pressure of inventory buildup and price competition.
• End apparel brands: If upstream prices continue to fall, brands may delay orders and compress procurement volumes, waiting for lower cost windows.

In key production clusters like Xiaoshan, Shaoxing in Zhejiang and Shengze in Jiangsu, inventory pressure is rising. Some small and medium-sized chemical fiber plants have started voluntary production cuts or maintenance to avoid further inventory expansion.

Triggers for a Short-Term Rebound

Recovery in polyester filament yarn sales depends on three variables:

1. Cost stabilization: If polymerization costs stop falling, downstream hesitation may ease, releasing some urgent orders.
2. Terminal order recovery: August is usually the stocking season for autumn/winter fabrics. If foreign trade orders improve seasonally, the sales ratio could return to 40%-50%.
3. Production control: Capacity cuts by leading firms will determine how quickly supply-demand balance is restored. Collective cuts can accelerate destocking.

Historically, a sales ratio below 30% rarely lasts more than two weeks, as industry self-regulation prompts supply-side adjustments. However, the current adjustment is complicated by high uncertainty in terminal demand recovery.

Practical Recommendations

For Buyers - Slow procurement in the short term and wait for further price bottoming, but watch for rebound risks. - Monitor the spread between polyester raw material prices and filament yarn prices. When the spread narrows to near cost, it is a good time to lock in purchases. - Prioritize short-term supply agreements with medium-to-large suppliers that have cut production, to avoid supply disruptions from small factories under inventory pressure.

For Foreign Trade Firms - Given the downward price trend, shorten valid periods of quotations to 3-5 days to hedge against exchange rate and raw material volatility. - Use the current low-price window to sign price-locked orders with long-term clients, securing raw material costs for autumn/winter fabric orders. - Closely monitor U.S. tariff policy changes; any adjustment may alter downstream procurement pace, so prepare inventory plans in advance.