Recently, a friend of the editor who is engaged in trading has encountered headaches one after another. It can be said that “misfortunes never come singly.”
Trading companies often encounter trouble with orders
The editor’s friend’s company mainly deals with foreign trade orders, and there are many Ukrainian customers, so it is not easy to receive orders this year. First, orders from Ukraine were canceled and suspended, new orders were reduced, and orders in production were stopped. Costs were invested but the payment could not be recovered, resulting in difficulties in capital turnover. Then, the domestic epidemic spread and the Shanghai port was closed, causing difficulties in cargo transportation, and the “hard to find a container” intensified. Affected by the slow logistics and transportation, the delivery period has been extended indefinitely.
A friend of the editor revealed that an order of 100,000 meters was delivered to Ningbo Port on April 2, but it was still stranded at the port on May 2. A month later, the container still has not arrived. For another 50,000-meter order, due to time constraints, I ordered a container directly. Almost only one-third was used, but the freight was three times the normal price.
But now, more troubles are coming, all of which are caused by some adverse reactions caused by the epidemic. According to a friend of the editor, I recently received an order for 3,000 meters of 420D Oxford cloth. Because Oxford cloth of this specification is relatively thick, it is not as common as polyester taffeta and pongee, and there are many gray cloths in stock. In addition, under the epidemic control situation, it is difficult for gray fabrics produced by factories in peripheral areas to enter the local market, so there are not many manufacturers who own this kind of gray fabrics. Now, this order has been processed into finished fabrics in the dyeing factory, but many quality problems have been discovered. It was studied that the problem was with the quality of the gray fabric. Finally, you have to find a gray fabric manufacturer to return the gray fabric and buy a new one with acceptable quality for processing and dyeing. This process is time-consuming and labor-intensive, seriously delaying the production schedule.
Special specifications of vintage rags are sold out
Since March, the epidemic situation has been tense and control has been tightened. Not only has transportation been slow, but some weaving companies have also suspended work and production. Textile companies generally face problems in transporting raw materials and products, and insufficient production capacity. At the same time, companies are struggling to receive orders, and gray fabric inventories continue to rise. This has resulted in a mountain of stockpiles of conventional gray fabrics, and a tight supply of special gray fabrics, so much so that even older “bad” fabrics have been sold out.
Not long ago, a photo of a moss-covered gray fabric circulated in WeChat Moments. A manufacturer said that all the moss-covered gray fabrics in the photo were sold out. This means that the supply of individual gray fabrics is very tight. Some fabrics in stock that have been in stock for a long time can continue to be used, but only for domestic orders with low quality requirements, especially market goods. Foreign trade orders are obviously not suitable for production with this type of gray fabric. But there are still some manufacturers who want to “fish in troubled waters” and get by.
Conflicts over gray fabric inventory will intensify
In today’s general environment, the costs of trading companies have increased in every link. It can be said that they accept orders at a loss, just to circulate funds and feed workers.
In the long run, the second half of the year may result in serious overcapacity of conventional gray fabrics, and a contradictory situation of short supply of special gray fabrics and queues to get goods. Since March, the operating rate of weaving enterprises has been at a low level, and factories have been reducing or suspending production. According to data from Silkdu.com, the current operating rate of weaving enterprises in Jiangsu and Zhejiang is only 48%. However, even if the operating rate is low, factory production and sales are still difficult to maintain. From the sample data collected by China Silk City Network, it can be seen that in late February, the Shengze area entered the inventory accumulation stage, and the current market inventory is still around 35.8 days. of high position.
When production and sales are difficult to balance, the increased inventory can only be of some conventional varieties, while special varieties need to be custom-woven, and even the raw materials may need to be purchased now. This intensifies the contradiction between conventional and special gray fabrics.
It has entered May, spring and summer quick orders are about to end, and the market has begun to prepare for winter quick orders and next spring and summer futures orders. In addition, the domestic epidemic situation has basically been alleviated, and the domestic sales market is still improving better than the foreign trade market.
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