The August 28 sales data delivered a cold shower to the polyester filament market: the average sales-to-output ratio of sampled enterprises was only 34.7%, up 5.3 percentage points from the previous trading day, but still far below the industry's healthy line (usually above 80%). More worrying, downstream resistance to high prices has not subsided with the rebound, and inquiries remain sluggish. Behind these numbers lies a typical stalemate of high costs and low transactions, unlikely to break in the short term.
Event Background
A 34.7% sales ratio means nearly two-thirds of output failed to convert into immediate orders, with inventories passively accumulating. The sample shows extreme divergence, from 0% to 500% sales ratios: some enterprises recorded zero sales, while a few achieved five-fold overselling. This indicates demand is not universally weak but highly concentrated among suppliers with price advantages or strong customer loyalty. Such divergence intensifies wait-and-see sentiment—buyers expect lower prices, while sellers resist concessions due to cost support.
Key raw materials for polyester filament, PTA and MEG, have remained firm recently, compressing margins in the polymerization and spinning stages. High costs leave factories little room to cut prices, yet downstream weaving mills, facing insufficient orders, cannot absorb expensive inputs. Both sides are 'holding firm,' leading to a typical tug-of-war. Historical experience suggests such standoffs usually end when one side compromises, and current inventory pressure is forcing upstream to make a choice.
Industry Impact
The direct consequence of prolonged low sales ratios is rising inventory levels. For filament factories, this means increased capital occupation and storage costs; if sustained for weeks, it may force price cuts or production cuts. Conversely, reduced output would lower demand for PTA and MEG, pressuring raw material prices, forming a negative feedback loop. For downstream weaving and garment enterprises, if raw material prices ease, their margins improve, but the 'buy when rising, not when falling' mentality may prompt further procurement delays.
From a regional perspective, major filament-producing areas such as Shengze, Changxing, and Xiaoshan may face downward adjustments in operating rates. Small and medium factories in these regions typically lack bargaining power, and under the dual squeeze of rising raw material costs and weak demand, cash flow risks are particularly acute. Large integrated polyester leaders, with their self-supplied raw materials, can partially hedge costs, and industry concentration is likely to increase during the stalemate.
Price expectation divergence is another feature. Some traders believe the 'Golden September and Silver October' peak-season demand has not been disproven, and low-price stockpiling opportunities are near; others fear a sustained demand slump due to weak macroeconomic recovery. This divergence amplifies volatility in futures and spot markets, complicating export order pricing. For exporters, exchange rate fluctuations and weak overseas demand add caution to long-term contract signing.