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Textile raw materials fall, the market is poor

Views:0     Author:Site Editor     Publish Time: 2021-09-08      Origin:Site

After the devastation of the off-season in August, are you still looking forward to "Golden Nine Silver Ten"?

"I feel that 'Golden Nine and Silver Ten' is not going to be good. If it is better, it will start to improve in August. According to the current situation, the market may not be good." Chief Lei, who specializes in children's clothing, said. "In the second half of the year, the overall situation will not be good. There will be a wave of market conditions in the gold, nine and silver ten, but I don't know how long it will last. It mainly depends on the temperature situation and foreign epidemics." said Mr. Li, the main business of the elastic series.

"'Golden Nine and Silver Ten' will not be good, mainly because the demand is not good, but for us the traditional peak season has little effect, we still take orders steadily." said Mr. Qian, who specializes in suede and corduroy. "The market situation in the second half of the year still needs to wait and see. The foreign epidemic has a greater impact, and it is still difficult to judge." said Mr. Zhang, who specializes in home textiles and apparel fabrics.POCKET FABRIC company-DADITEXTILE

The statements of several textile bosses above all stated that the market conditions in the second half of the year are difficult to achieve the expected results. Although last year was affected by the epidemic, the market ushered in a turning point in mid-August. Many textile companies have received many orders. But this year is different. Compared with last year, this year's domestic epidemic has been basically under control, and foreign markets are slowly recovering. However, the time has come to the end of August, and the peak season has not yet appeared. Obviously, it should not happen.

The main reason for the poor market situation this year is that the profits of the textile bosses on the orders are pitiful.

Why don't you have an order that doesn't make money?

"In August, the order was obviously less than before, but it was still able to receive it. The profit was low, and only regular old customers. I just rejected an Oxford cloth customer, and the profit was thin (10%, normal 20%). PU coating increased by 10%. % Is much more expensive and the balance is long, so it is easy to lose money and not pick it up." said Mr. Lei, who specializes in children's clothing.

"There are not many orders now, similar to the previous period, but less than the same period last year. The main reason is that the spandex elastic series have more traffic. Compared with the beginning of August, the basic profit of the current orders is not high. Many of them are for guarantee. We only take over for production, but as long as we don’t lose money, we will still take over." said Mr. Li, who is mainly engaged in the elastic series.

"Current orders are okay, and they have always been relatively stable. The increase of 10% from last year is not much better. The old products are nothing hot-selling. Sofa and other home textile fabrics are mainly used, sales are stable, regardless of the four seasons. But it is The profit is not much, so I can barely keep the cost." said Mr. Qian, who specializes in suede and corduroy.

At present, the market is still in the status quo that there are orders and no profits. From the end of June, the phenomenon of rapid increase in raw material prices is even more obvious. Some textile bosses once complained that raw materials in June did not have to buy all of them at a time due to capital problems. Mi’s pongee orders were originally only 10% profitable, and in July they lost a sum of money instantly. It is conceivable that this year the textile boss’s profit on the orders on hand was so meagre.

Recently, the price of raw materials has fallen, and the textile boss has not purchased it.

Starting from the beginning of August, the price of polyester yarns began to fall, and the promotional routines of polyester manufacturers that had been suspended for more than a month began again. However, this time the textile bosses did not seem to buy it. Although the price drop was expected, for a long time The price increase is bound to usher in a period of price decline, but this time the price drop has a lot less bosses buying silk.

"There are purchases of raw materials for promotion, about ten days or so, but we are not optimistic about the later market. There may be promotions, and there is no need to buy in large quantities." said Mr. Li, the main stretch series.

"There is no purchase, it is purchased on demand. However, it is estimated that the raw materials will rise a little later." The general manager of suede and corduroy said. "The price of raw materials fluctuates greatly, so we will not buy in large quantities. We will still purchase according to the variety and consumption." said Mr. Zhang, who is mainly engaged in home textiles and apparel fabrics.

Obviously, even if the raw materials are promoted, the textile bosses will not buy in large quantities. First of all, they think that there will be promotions in the later period. Secondly, they have sufficient raw materials on hand. Finally, there is a lack of funds on hand.

"They are all regular customers, the payment situation is basically stable, and there is no default, but it usually takes 2-3 months to return the payment. The funds on hand are not sufficient." said Mr. Lei, who specializes in children's clothing.

"Basically, they are all regular customers, and the payment is in arrears. It usually takes one to two months to pay back." said Mr. Li, who specializes in the elasticity series.

"Customers' payment is relatively stable, and it usually takes 3-4 months." said Mr. Qian, who specializes in suede and corduroy.

Although the above-mentioned textile bosses said that the payment situation is relatively stable, they are usually old customers. Old customers basically do not settle in cash. Generally, it takes 1-4 months to return the payment. During this period, the corporate funds are not Abundant, resulting in not a lot of funds to buy raw materials.

Under the epidemic, shipping continues to be tight, and freight rates are skyrocketing

The reporter was informed that last year, the shipping cost of products sold to North American ports in China was between US$3,000 and US$5,000 per box. Many companies still have relative profit margins. At present, China's shipping costs to the North American market are as high as US$15,000 to US$20,000. In addition, the Global Container Freight Index shows that the shipping price of China/Southeast Asia-North America East Coast exceeded US$20,000, a year-on-year increase of more than 500%.

According to reports, the cost of exporting products is now three times that of the beginning of this year. "The ocean freight is already greater than the value of the goods, and it is basically meaningless for export."

The reporter found in the investigation that many foreign trade companies are facing various pressures including freight rates and soaring raw materials, and even some companies with sufficient orders have not felt relieved.

According to a reporter's investigation, factories and overseas customers are continuing to wait and see in terms of the efficiency of cargo delivery. In the past, manufacturing companies started production at full capacity based on the order volume, and quickly delivered orders to overseas customers within a month, but at present, everyone needs to pay attention to the port and shipping dynamics. "(Sea shipping) routes, like airplanes, require timing, quantification, and pricing. The biggest problem currently encountered is that they cannot be timed. 

In the past, the departure time of ships was planned. For example, there were fixed schedules in the morning, afternoon and evening. Now most of them have been disrupted, and ships in almost every port are unpredictable." A senior official from a port company in South China told reporters.

According to the person in charge, the global epidemic prevention is still severe, resulting in low logistics efficiency. In the past, it only took 10 hours for a ship to undergo temporary inspections at the dock. Now in addition to loading and unloading, quarantine and disinfection are required. The crew needs to wait for nucleic acid test reports. Work can only be done after coming out, and it may take 20 hours for a ship to be completed, which leads to a prolonged waiting time for the next ship.

"The delivery cycle of orders is now slower than in the past. We have to charge a deposit (30% of the total goods price) after receiving the order. Basically, it will take two months to deliver." Zheng Bo told reporters that the company is in Customers in Germany and Spain have already placed orders for half a year at the beginning of this year, and then the two sides will adjust the order volume every month according to the epidemic situation and changes in the shipping situation.

However, after the delivery of the goods, the transportation problem cannot be controlled, which is a common problem encountered by many foreign trade companies. "Transportation problems are now mainly concentrated in two aspects, one is the container (container), and the other is the space (space)." Zheng Bo said that now colleagues have to grab both the space and the container. Sometimes the space is grabbed. The freight company was unable to provide empty containers, which resulted in the goods being unable to be packed and transported.

August when inventory should be reduced

Downstream grey cloth stocks have gone up, and the start-up has dropped significantly

At the time when domestic and foreign orders were placed in mid-to-late August, the operating rate of weaving showed a downward trend.

Recently, water jet loom companies in Changxing, Anhui, and Siyang in northern Jiangsu have all experienced varying degrees of load reduction and parking. If the terminal textile and clothing market did not improve as expected in September, the parking time may be extended. The local water jet loom company in Shengze, due to sewage restrictions in June and July, restricted the operating rate of local looms from dropping to around 30% to 30%. However, after the exhaust restriction ended, the operating rate was difficult to increase significantly. Around 70%. The large circle machine returned from the Spring Festival holiday because the price of upstream textile material spandex continued to rise to new highs. The buyer and seller’s orders could not be negotiated many times due to the price. There has been a lack of orders and insufficient operating rate. In addition to rising prices of textile raw materials, the lack of operating rate is mostly caused by insufficient new orders at home and abroad.

Warp knitting machine companies ushered in the dawn of joy in June of this year. New foreign orders for autumn and winter were issued to domestic weaving companies. Most companies are busy rushing to make orders day and night. As new orders are delivered one after another, most companies are optimistic about regular warm grey fabrics in the second half of the year. Inventories rose to high levels. Downstream bosses and cloth merchants were actively hoarding goods. However, entering July was like a blow. New orders fell rapidly. After August, the industry welcomed the news that different production bases had to reduce the burden due to the high inventory pressure of grey fabrics. .

In addition, the inventory of grey fabric factories has continued to rise since July, and the upward trend may continue to September. Entering the time node in August when the inventory days of grey fabrics should have fallen during the same period, it has shown a significant upward trend. Most downstream users began to worry about the market in the second half of the year and had to consider parking to reduce inventory pressure. The current inventory pressure of grey fabrics in the weaving industry is particularly evident.

The illusion of prosperity is pierced, the textile market will inevitably return to the off-season again

In May, due to the market's confidence in the orders in the second half of the year, there was a wave of concentrated release of orders in the market. But this wave of market is coming and going fast, and the textile market has gradually entered a calm state in just one and a half months.

The boom in the textile market is actually an illusion. If there is no stockpile caused by rising raw materials and the squeeze of production time from overseas epidemics, this wave of orders will not advance in advance and will only flow smoothly. Now that this illusion has disappeared, the textile market seems inevitable to return to the off-season again. There is a serious lack of orders in the market. July and August itself are the traditional off-season for textiles, but because the off-season in the first half of the year is not low, it has brought a lot of psychological gap to everyone.

The current coldness of the textile market is due to the large increase in the price of raw materials in the early stage and the high valuation, but the price increase of downstream grey fabrics is relatively small, and the profit of grey fabrics has been compressed. The orders of the downstream cloth bosses are always in the empty window period, and the authenticity cannot be verified. The current orders are still less than the time point for heavy volume. At the same time, the downstream and social stocks are adequately replenished, and the raw material inventory is relatively high. On the other hand, the crude oil has a short-term correction.

The industry chain buys up and does not buy down. In the process of raw material callback, there are few transactions in the middle and lower reaches, especially spot orders. Now spot fabrics have become the mainstream. If the market is to become popular again, it must be supported by a large number of "market goods". However, market goods used various price historical lows to enter the market to stock up. Nowadays, the price pulls back naturally and does not think about purchasing, and the downturn is reasonable.

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