On July 1, China's chemical fiber market released a clear signal: the average sales-to-production ratio of polyester filament yarn sample enterprises was only 35.8%, down 3 percentage points from the previous trading day. This figure not only falls below the industry's commonly recognized 50% threshold but also means that over 60% of capacity failed to convert into actual sales. The market is entering a 'cold period' of deep upstream-downstream gaming.
Signals Behind the Data
Looking at the specific sales data for the day, among 24 sample enterprises, 7 had a sales-to-production ratio below 20%, with the lowest even at zero. Only a handful of enterprises reached above 60%, and none exceeded 85%. This distribution pattern of 'collapsed middle and polarized ends' indicates that the market is not universally weak but rather that demand is concentrated among a few suppliers with price or quality advantages.
More notably, although polyester filament yarn manufacturers adjusted their list prices, actual transaction prices remained stable. Upstream companies attempted to test market reactions through minor price adjustments, but downstream users maintained a 'strong resistance to high prices,' keeping purchases at essential levels. This 'you adjust, I don't move' pattern means that the traditional strategy of exchanging volume for price is almost ineffective in the current phase.
Logic and Transmission of Upstream-Downstream Gaming
The root of the current stalemate lies in the mismatch between costs and demand. On one hand, upstream raw materials like PTA and MEG remain at relatively high levels, putting cost pressure on polyester filament yarn producers and strengthening their willingness to hold prices. On the other hand, the recovery of orders in downstream weaving and apparel industries has been slower than expected, especially with foreign trade exports affected by global economic fluctuations, leading buyers to prefer destocking over restocking.
This gaming is having divergent impacts on different links of the industrial chain. For large polyester plants, low sales ratios mean rising inventory pressure; if this persists for over a week, they may be forced to adopt larger price cuts or production reductions. For small and medium-sized weaving enterprises, the dual squeeze of high raw material procurement costs and weak finished product sales is further narrowing profit margins. For foreign trade companies, the current uncertainty in exchange rates and shipping costs makes locking in long-term orders more cautious.
Short-term Outlook and Key Observation Points
Historically, July is typically a traditional off-season for the textile industry, with factors like high-temperature power cuts and worker vacations leading to lower operating rates. However, this year, superimposed with external variables such as a slowing global economy and recurring trade frictions, the off-season effect may be amplified.
Key observation points for the coming week include three: first, whether polyester plants will initiate joint production cuts to support prices; second, whether downstream weaving machine operating rates can remain above 70%; third, the impact of international crude oil price trends on PTA costs. If all three turn negative, polyester filament yarn prices may experience a phased correction of 3%-5%.