On July 29, the polyester filament yarn (PFY) market saw a notable shift in transaction data. The average sales-to-production ratio among sample enterprises reached 47.6%, a sharp increase of 19.4 percentage points from the previous trading day—the largest single-day improvement in recent weeks. Yet beneath this seemingly encouraging rebound, the industry's real situation remains far from optimistic.
Looking at individual sample data, the ratio distribution across 25 firms was highly fragmented: the highest hit 80%, while the lowest was only 20%. More than half of the companies reported ratios below 40%, with only a few reaching above 60%. This wide dispersion suggests that the uptick was not driven by broad demand recovery but by sporadic promotional efforts from certain manufacturers.
Promotional Efforts Limited, Downstream Sentiment Weak
PFY producers have generally adopted a 'promotional sales' strategy, but discount intensity remains restrained. Downstream weaving mills and texturing plants show little buying enthusiasm, sticking to just-in-time procurement with minimal speculative inventory buildup. Industry data indicates that loom operating rates in Jiangsu and Zhejiang provinces have hovered around 60% since late July, reflecting insufficient end-order sustainability. This sluggishness directly slows upstream raw material purchasing.
From a supply chain perspective, PFY prices are closely tied to upstream PTA and MEG costs, but recent cost-side fluctuations have not effectively passed downstream. Polyester plants continue to face mounting inventory pressure, with some reporting stock accumulation. Even if the sales ratio improves periodically, it is unlikely to reverse the industry's oversupply condition.
Inventory Pressure and Cash Flow Risks Compound
For weaving and texturing segments, the challenge extends beyond procurement decisions. Industry surveys reveal that practices like advance payment for materials and acceptance bill lock-ups are widespread among small and medium enterprises, directly impairing their ability to restock. The persistently low PFY sales ratio essentially reflects the dual squeeze of weak end-user demand and tight intermediate cash flow.
A noteworthy development is the U.S. Trade Representative's recent statement that tariffs on Chinese goods will not exceed 20%, with multiple tariff adjustment plans to be announced in the coming weeks. Should tariff policies show substantive relaxation, export-oriented textile firms may see improved order expectations, which could eventually transmit upstream. However, policy implementation takes time and is unlikely to alter the near-term weak market dynamics.
Short-Term Outlook and Operational Strategies
Based on current sales data, inventory levels, and end-demand assessment, the PFY market is likely to continue its weak, volatile trend through early August. Manufacturers may intensify promotional efforts, but conditions for a sustained sales recovery are not yet in place. Downstream users should maintain a demand-driven procurement pace and avoid chasing price increases based on short-term data fluctuations.