Polyester filament yarn production outpaces demand in 2024

Production of polyester filament yarn (PFY) in 2024 is projected to rise approximately 8 per cent, outpacing the estimated 5-6 per cent growth in end-user demand. While new capacity additions were limited, PFY producers have maintained high operating rates, particularly during the first quarter when many plants avoided scheduled maintenance. However, increased production, coupled with sluggish global demand, has led to a build-up of inventory across the supply chain.

Export markets were mixed. While the US market has shown resilience, exports to India were hindered by new certification requirements. Additionally, the destocking cycle in key markets has impacted overall export volumes. Domestically, weak consumer confidence and a slowing real estate market have dampened demand for textiles and apparel. Retail sales growth has been tepid, further exacerbating the inventory issue.

As a result, the excess PFY production is being absorbed into inventory at various stages of the supply chain, from synthetic fiber manufacturers to fabric mills and intermediate distributors. This imbalance between supply and demand raises concerns about potential price pressures and margin erosion in the coming months.