On August 28, the average sales rate of polyester filament sample enterprises stood at 34.7%, up 5.3 percentage points from the previous trading day. While this appears to be a recovery, it remains at a low level for the year—over 60% of sample enterprises recorded sales rates below 30%, and some even hit zero. Is this a bottom signal or a pause in the decline? The answer lies in the tug-of-war between upstream and downstream.
Background
The latest fluctuation is not an isolated case. Since mid-August, the sales rate has hovered around 30%, dipping to 29.4% on August 25. Public data shows a stark divergence on August 28: the highest sales rate reached 500%, while the lowest was 0%, with a median of 20%. This extreme dispersion suggests that the market is not broadly recovering; instead, a few enterprises with competitive pricing or differentiated products are securing orders, while most still struggle under inventory pressure.
The price stalemate stems from pressure on both cost and demand. Upstream PTA and MEG prices are fluctuating narrowly with international oil prices, providing some cost support. However, downstream weaving mills are operating at reduced rates, showing strong resistance to high raw material prices. Industry surveys indicate that looms in Jiangsu and Zhejiang are running at around 65% capacity, 5 percentage points lower than the same period last year. Terminal orders are mainly small, just-in-time purchases, lacking large orders, which slows the procurement pace of polyester filament.
Industry Impact
A low sales rate directly impacts the cash flow of polyester plants. At current prices, POY 150D/48F is quoted around 7,500 CNY/ton, with costs near 7,200 CNY/ton, leaving a theoretical profit of only 300 CNY/ton. If the sales rate remains below 40%, inventory days will exceed 15, forcing some plants to cut production or reduce prices. Indeed, several small and medium polyester plants have begun maintenance to reduce supply and stabilize prices.
For downstream buyers, the current deadlock means greater bargaining power. With sluggish inquiries, traders and weavers can compare prices more calmly and even push for lower quotes. However, be cautious: if crude oil spikes or polyester plants cut production collectively, prices could rebound quickly. Therefore, buyers should seize the current window but avoid overstocking to prevent inventory depreciation.
For exporters, polyester filament price fluctuations directly affect the competitiveness of export quotes. Southeast Asian demand remains tepid, with buyers in India and Vietnam pressing for lower prices, while RMB exchange rate volatility adds complexity. It is advisable for exporters to include price adjustment clauses in long-term contracts to hedge against raw material price risks.