Polyester DTY Price Easing: Regional Spread Between Shaoxing and Hangzhou Signals New Supply Chain Dynamics

On July 27, the polyester DTY (150D/48F, semi-dull low-elastic) market showed an interesting price spread: Zhejiang Juxing Chemical Fiber quoted 9,350 yuan/ton, while Rongsheng Petrochemical quoted 9,550 yuan/ton—a 200 yuan/ton gap between two cities just over 100 kilometers apart. This is not random fluctuation but a microcosm of the current supply-demand imbalance in the polyester chain.

Background

According to public quotations, DTY ex-factory prices in Shaoxing and Hangzhou have clearly diverged. Juxing's 9,350 yuan/ton represents a 0.5% drop from the previous week's average of 9,400 yuan/ton, while Rongsheng's 9,550 yuan/ton remains relatively firm. Such a spread for the same grade and specification is rare in the past.

What does this mean? First, different companies face different inventory pressures, with smaller chemical fiber mills cutting prices first to destock. Second, downstream fabric mills show low buying interest, rejecting higher-priced supplies. As one of China's largest chemical fiber and fabric clusters, Shaoxing's price weakness often serves as a bellwether.

From the upstream cost side, PTA and MEG prices have both retreated recently. PTA spot prices fell from 5,900 yuan/ton at end-June to around 5,700 yuan/ton, while MEG dropped from 4,100 to 3,900 yuan/ton. Weaker raw material cost support provides room for DTY price cuts.

Industry Impact

For downstream weaving mills, DTY price easing is a double-edged sword. In the short term, lower procurement costs help ease cash flow pressure. But if prices continue to fall, inventory depreciation risks loom. The current loom utilization rate in the Jiangsu-Zhejiang region has slipped from 75% in June to around 70%, with insufficient end-garment orders as the root cause.

From a foreign trade perspective, recent volatility in the RMB exchange rate creates dual effects. On one hand, RMB depreciation boosts export price competitiveness; on the other, falling DTY intermediate prices may squeeze profit margins for exporters.

Notably, the spread between DTY and POY is narrowing from the normal 800-1,000 yuan/ton to around 600 yuan/ton. This severely compresses margins for texturing mills, potentially forcing small players to halt or switch production. Industry consolidation is accelerating.

Practical Recommendations

For Buyers - Monitor the Shaoxing-Hangzhou price spread. If it widens beyond 300 yuan/ton, prioritize lower-priced sources, but verify product quality consistency. - Adopt a phased procurement strategy for Q3 orders to avoid bulk stockpiling. With prices in a downtrend, expect 50-100 yuan/ton further easing. - Negotiate price protection clauses with suppliers to compensate for subsequent price drops, reducing inventory depreciation risk.

For Foreign Trade Firms - Leverage the RMB depreciation window to offer more competitive FOB prices to overseas clients, but lock in forward FX rates to hedge against reversal. - Monitor DTY substitute prices in Southeast Asia. Current quotes in Vietnam and Indonesia (including freight) are around 9,200-9,400 yuan/ton, narrowing the gap with China. Beware of order diversion. - Include floating price clauses in export contracts to accommodate raw material cost fluctuations.