Sincerity of customers is valuable, and the price of raw materials is higher. Faced with high raw material prices, fabric companies can be said to be reluctant to cut their losses. On one side are the raw material factories that only raise prices but not concessions and have complete control over the price. On the other side are the end customers who don’t only own the fabrics. If you raise the price, I will go to other stores to buy them. The price of raw materials can increase by several thousand. The customer finally agreed to increase the price of fabrics by only a few cents.
The price of raw materials has continued to rise recently, which can be said to be a hardship for cloth bosses. The person in charge of an Oxford cloth company in Shengze that deals with the US market told the author that their Oxford cloth market has been relatively stable this year, and orders have increased significantly since the fourth quarter. Due to the high weight of Oxford cloth, it requires much more raw material than regular fabric. The recent continuous increase in raw materials and the previous increase in dyeing fees have caused their costs to rise significantly. For this reason, they discussed with customers to slightly increase the price. Customers will not accept every price increase immediately, and foreign customers will not place additional orders like domestic aunts who buy houses or gold because of the skyrocketing price of raw materials in China. Many people are bullish about the price of raw materials in 2017. If the new orders in 2017 are still executed at the current prices, it is estimated that if the raw materials increase in the future, production will be at a loss. However, customers are not buying it. Until now, everyone is still They were all deadlocked.
In the first three quarters, raw materials increased steadily, and in the fourth quarter, raw materials surged
Since the fourth quarter, the price increase of raw materials has intensified. From the table below, we can see that the price of raw materials in the fourth quarter increased by 617 yuan/ton from the previous quarter and 1,586 yuan/ton from the same period last year. However, judging from the trend of raw material prices throughout the year, prices have shown a steady upward trend in the first three quarters. Compared with the sharp fluctuations in prices last year, prices this year are relatively more stable. In the first three quarters, raw materials were relatively stable, and the cost risks of fabric companies were relatively reduced. However, in the fourth quarter, raw material prices were like a wild horse that could not stop rising. Faced with the current high raw material prices, some companies adopt a one-to-one negotiation system, and some companies quote based on daily raw material prices. Raw materials have skyrocketed. For fabric companies, many companies have sacrificed profits or lost orders.
The surge in raw material prices has hurt fabric companies. From the market survey of China Silk City Network, we found that in this survey, many companies said that there were more orders this year than last year. However, the good market encountered a sharp increase in raw materials. Only textile people can understand this sour feeling.
Textile enterprises’ orders increase, rising costs and shrinking profit margins
In this round of questionnaires, 32.53% of companies said that the order receiving situation in the fourth quarter of this year was better than in other times. In addition, 26.51% of companies said that the order receiving situation was better in the second and third quarters. Overall, environmental protection rectification has swept across the country this year. Under strict environmental protection pressure, some backward and polluting production capacities have been eliminated one after another. The environmental protection of Shengze’s textile industry is at the leading level in the country. Some orders from Jiangsu and Zhejiang were transferred to Shengze due to the influence of local environmental protection policies, which caused Shengze’s printing and dyeing market to remain busy. In addition, under the La Nina effect, there is an expectation of extreme cold this winter, which has led to heavy shipments of cold-proof fabrics since October this year, such as some imitations. Memory cold-proof fabrics and some down cold-proof fabrics are particularly popular; in addition, the depreciation of the RMB is also a major benefit to the foreign trade market. The depreciation of the RMB has reduced the export prices of textile companies, which has enhanced the export competitiveness of textile foreign trade companies.
Although the textile orders of Shengze companies have increased this year, many companies have said that fabric profits have significantly decreased this year. According to this survey, about 48.6% of companies said that orders have increased this year, but profits have decreased. In the first half of this year, the raw material market was average, and the fabric market in March and April was also tepid. The neither salty nor lukewarm market situation has made many textile companies pessimistic. The market is bearish and the fabric inventory is high. Faced with price reductions from customers, most of the weaving companies just give up the price and sell the goods. Affected by the expected suspension of production at the G20 Summit in August, many orders arrived early, resulting in a busy market in August. During this period, dyeing fees rose sharply. For many companies that had signed orders and negotiated prices before, dyeing fees were bound to rise sharply. causing profits to shrink. Let’s talk about the skyrocketing price of raw materials in the fourth quarter. Many fabric companies have been unable to keep up with the skyrocketing price of raw materials. Although fabric prices have been adjusted several times, these price increases seem to be a drop in the bucket in the face of raw materials. Faced with the cruel reality of either signing orders or running out of orders. , many companies can only make small profits but quick turnover.
As the end of the year approaches, many companies are in the final stages of finalizing their orders, and some dyeing factories will also start to suspend production during the holidays in mid-January. As the Spring Festival approaches, receiving orders will no longer be the main task. Textile companies have worked hard for a whole year, and now collecting payments at the end of the year is so important. Collect the money at the end of the year and have a stable year. In the coming year, you will continue to sign orders and rush for goods to pay tribute to your hard work.�One year textile fabric man.
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