The Chinese polyester filament yarn (PFY) market demonstrated price stability during the first week of February 2025, reflecting a well-calibrated equilibrium between supply and demand. Despite seasonal disruptions from the Lunar New Year holidays, PFY prices held firm, supported by resilient manufacturing activity, steady feedstock costs, and gradual demand recovery in the domestic textile sector.

Supply conditions for PFY remained robust, underpinned by stable purified terephthalic acid (PTA) feedstock prices and accumulated inventories exceeding 900,000 tons since December 2024. Post-holiday operational restarts proceeded smoothly, with the polyester polymerization rate inching up to 79.6% by February 4, signalling a measured return to pre-holiday production levels. China’s manufacturing activity, though expanding at a slower pace, continued to drive raw material procurement and inventory build-up. Improved vendor performance and efficient logistics further alleviated supply chain pressures, enabling mills to maintain consistent PFY output. Notably, client-driven stockpiling and competitive production costs, buoyed by PTA oversupply, reinforced supply-side resilience despite lingering labour shortages in the immediate post-holiday period.

On the demand front, moderate consumption of PFY prevailed as downstream filament yarn mills prepared to resume operations between February 5 and 13. Domestic textile manufacturers prioritized replenishing PFY inventories to meet spring production deadlines, though full operational recovery awaited workforce normalization after the holiday hiatus. Export demand, however, faced headwinds as U.S.-China trade frictions intensified. The revocation of de minimis exemptions for low-value Chinese shipments—previously allowing duty-free entry for goods under $800—threatened to raise costs for e-commerce exporters like Temu and Shein, dampening overseas orders thereby reducing demand for PFY. While domestic demand offset some of these losses, the textile sector’s reliance on export markets introduced an element of caution, tempering near-term procurement enthusiasm.

China’s broader economic landscape offered mixed signals. The marginal dip in manufacturing PMI from 50.5 in December to 50.1 in January according to NBS China highlighted softer expansionary momentum. Increased purchasing activity and inventory accumulation reflected improved business sentiment, driven by stronger domestic orders and targeted promotional efforts. However, external vulnerabilities, including trade policy uncertainties and weaker global demand, underscored the economy’s reliance on internal consumption.

Looking ahead, PFY prices are expected to remain range-bound in the short term, with upward potential tied to post-holiday demand acceleration as textile mills return to full capacity. Domestic stimulus initiatives and seasonal production cycles may further bolster consumption, while sustained PTA inventory levels could cap cost-driven price hikes. Conversely, escalating U.S. trade barriers and competitive pressures from Southeast Asian textile exporters pose downside risks. Market participants will closely monitor policy responses to trade tensions and domestic consumption trends, which will ultimately dictate whether China’s PFY sector can sustain its fragile equilibrium in an increasingly complex global environment.