Diverging nylon DTY and FDY - a direct bearish factor for pre-spring festival operations

2025 has drawn to a close. Looking back, this was a year fraught with challenges for the nylon industry and a year of intense pressure for the nylon filament sector. Under the dual pressures of capacity expansion and slowing demand growth, high inventories, squeezed processing margins and inventory devaluation became the norm for nylon filaments. In terms of product breakdown, FDY and DTY exhibited both convergent and divergent trends.

1. Filament mill inventories have declined, yet product inventory differentiation remains pronounced

Over the past two months, driven by rising raw material prices, filament mills secured a concentrated influx of orders at low price levels. In December, downstream buyers gradually picked up goods, allowing filament mill inventories to decline. Across the entire industry, the average inventory level dropped to around 30 days. However, from a product mix perspective, the destocking effect of DTY remained significantly better than that of FDY.

At the inventory peak in October, FDY inventories had soared to 60-70 days, while DTY inventories stood at around 30-40 days. Against the backdrop of already substantial disparities in inventory bases, between November and December, downstream buyers were more inclined to stock up on DTY on price dips compared with FDY, which faced more ample supply and weaker demand. This directly resulted in DTY's destocking performance outpacing that of FDY. Currently, the average inventory level of DTY has dropped to around 10 days, whereas FDY inventories still linger at a high level of over 50 days.

2. Processing margins have been squeezed to the limit

Under the dual pressures of capacity expansion and slowing demand growth, processing margins of nylon filaments kept shrinking throughout the year. Particularly between November and December, as the price increase of nylon filaments failed to keep pace with that of raw materials, processing margins were drastically compressed. Furthermore, filament mills mainly fulfilled low-price orders or concluded transactions at discounted prices in December, with few deals struck at the elevated prices. As high-priced raw materials were gradually incorporated into production costs, the actual loss margins of filament mills continued to widen.

In terms of processing margin trends, FDY and DTY also showed differences. In 2023, FDY outperformed DTY in this aspect. In 2024, as FDY capacity expanded and demand growth slowed, its processing margins were progressively squeezed; in contrast, DTY saw its processing margins edge up thanks to modest new capacity additions and sustained demand from the spandex industry. In 2025, processing margins of both products declined. FDY suffered from a more severe surplus situation than DTY, yet given DTY's relatively robust profit base in the previous year, its loss margin remained narrower than that of FDY even with a larger margin compression.

3. Divergent export trends: FDY mother yarn leads the way

Amid the trend of integrated development in China's domestic nylon industry, its export competitiveness has long stood out in the global market. Exports of non-elastic filament (POY, FDY, HOY, etc.) and elastic filament (DTY) maintained steady growth overall, though the export characteristics of DTY and non-elastic filament have diverged slightly in recent years. From 2023 to 2024, DTY exports registered relatively strong growth, driven primarily by robust demand from Turkey, Brazil and Vietnam; meanwhile, non-elastic filament exports saw moderate growth in 2023, with a modest acceleration in 2024.

In 2025, the growth momentum of DTY exports slowed markedly, mainly due to the sluggish local economy in Turkey, weak consumer demand in Europe, and the loss of some orders from Brazil amid the anti-dumping sunset review against Chinese products. From January to November, DTY export volumes were basically flat compared with the same period last year. On the other hand, non-elastic filament exports posted strong growth, fueled by a surge in procurement demand for nylon FDY mother yarn from the Indian market. From January to November, non-elastic filament export volumes surged by over 39% year-on-year.

Monthly exports of nylon 6 non-elastic filament to India fluctuated around 2,000-3,000 tons in 2023. Starting from the second half of 2024, export volumes to India kept rising, and since the second half of 2025, monthly shipments to India have fluctuated around 6,000-8,000 tons. India's share of China's total nylon 6 non-elastic filament exports has skyrocketed from 20-30% in 2023 to the current 50-60%. This remarkable volume growth is mainly attributed to surging demand for FDY mother yarn and corresponding monofilaments. It is also the primary factor directly leading to the pronounced divergence in export growth between DTY and FDY this year.

In terms of recent demand performance, fine-denier 15D DTY and air-covered yarn have been relatively tight in the market; for FDY, only the demand for mother yarn remains relatively healthy, while demand for other FDY products is lackluster. However, the extruder screws used for producing FDY mother yarn are not interchangeable with those designed for conventional FDY products of 70D and below. As a result, the strong demand for mother yarn has not directly boosted the overall FDY market. The supply-demand imbalance in the FDY market can only be alleviated by supply-side adjustments. With less than 50 days left until the Spring Festival, some downstream enterprises have already started to curtail or suspend production.

For 2026 Spring Festival, downstream production cuts and shutdowns are occurring earlier and the holiday period will be longer. Filament mills are prioritizing maintaining DTY production while suspending FDY output. Recently, some filament mills have already appropriately idled some of their FDY production lines. It is expected that the pace of FDY production line curtailments and suspensions will pick up in January.