Recently, the editor asked many textile bosses a question: What fabrics are selling best these days? The answer is surprisingly the same: Where can I sell it? It would be great if it can be sold!
In March, the traditional peak season has not yet arrived, and the overall market transactions are flat. Fabrics such as four-way elastic and imitation silk that can still be shipped from time to time in the early stage have also begun to decline. Faced with rising inventory, textile bosses really panicked!
According to the sample companies monitored by China Silk City Network, it is now normal for finished product inventory to last for more than one month. Most weaving manufacturers have millions of meters of gray fabric on hand. The larger the scale, the higher the inventory. Relatively more.
It can be seen that orders in all links of the entire industry chain are shrinking, and the orders from weaving manufacturers, which are the intermediate links, have dropped most significantly. This has also directly led to oversupply in the market and weak bargaining power, making it even more difficult for companies to make profits. ! It is difficult for weaving enterprises to remove inventory. On the one hand, the reason comes from the high price of upstream polyester yarn, which makes it difficult to drive the sale of gray fabrics; on the other hand, the reason comes from the sluggish terminal demand.
01The price of polyester yarn is high, but it is difficult to drive the rise of gray fabrics
Since February, the rise in international crude oil has driven up the price of polyester raw materials, thereby stimulating an increase in polyester yarn prices. Throughout the second half of last year, the price of polyester products increased by more than 10%compared to the price at the end of last year. Specifically, FDY products have increased by about 15% compared with the same period last year, POY products have increased by more than 13% compared with the same period last year, and DTY products have also increased by about 11% compared with the same period last year. Even if the price of polyester yarn is at a high level now, the benefits to the gray fabric end are even more indescribable.
In terms of production and sales, generally speaking, manufacturers will stock up more or less goods before the holidays. However, since the Spring Festival, manufacturers have not been very enthusiastic about replenishing goods. Regardless of whether the polyester factory is vigorously promoting sales or riding on the momentum of crude oil, the production and sales of polyester yarn products are all average. There are only a handful of production and sales exceeding 100, which can even be described as “reluctant”.
02Unit volume has shrunk, and weaving manufacturers’ profits have shrunk by 70%
After the Spring Festival this year, mainly due to many unfavorable factors such as the frequent outbreaks of domestic epidemics, high upstream raw material costs, continued rise in shipping prices, and reduced overseas orders, the downstream woven gray fabric market performed poorly. Terminal demand is still difficult to recover. For the textile industry, clothing companies continue to suffer losses and accumulate inventory, and the demand for fabrics and gray fabrics has naturally shrunk sharply. Last year we kept saying that the ordering model of clothing companies has changed to “small batches, multiple batches”, but judging from this year’s situation, it is still mainly small orders.
In the past, the gross profit of weaving manufacturers was about 10%, but now the profit is basically about 3%, and some are even slightly losing or flat. In addition, there is a lot of pressure on payment, making it more difficult for weaving bosses this year. From the perspective of various cost expenditures, labor, water, electricity and rent costs have not decreased compared with previous years. Some scarce work types have increased prices at the beginning of the year. Raw materials have been rising slowly in February. However, the market competition is fierce, and most cloth bosses still have not increased prices. , I am afraid that the few orders will be increased in price.
03There are still positive factors, and the growth of textile and clothing is increasing
According to the latest data from the General Administration of Customs of China, from January to February 2022, my country’s textile and apparel exports were US$50.202 billion, a year-on-year increase of 8.86%. Among them, the export value of textiles (including textile yarns, fabrics and products) was US$24.741 billion, a year-on-year increase of 11.85%; the export value of clothing (including clothing and clothing accessories) was US$25.461 billion, a year-on-year increase of 6.10%.
Domestic textile and apparel sales continue to recover, but due to local epidemics, the growth rate of textile and apparel sales has slowed down. Of course, we must also see the good side. Clothing sales are gradually increasing and have not stopped rising due to the local epidemic. In addition, the epidemic has promoted the rise of e-commerce platforms, so even if the epidemic shows signs of rebounding,�, there is still a certain demand for clothing in the market.
Although the current textile market environment is not very optimistic, the entire textile enterprise is struggling to survive in every possible way. But generally speaking, companies are controlling operating costs and looking for a place to settle in the market.
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