Today, the current situation that textile owners generally face is: on the one hand, raw material prices remain high, and weaving mill owners are often wary of sudden price increase notices; on the other hand, downstream customers have put forward higher requirements for products. Costs and profits are almost upside down, which makes industry bosses sleepless at night… So, how will the fabric market perform after entering April?
The destocking of gray fabrics is slow and has risen to a high level last year!
The market conditions were hot last year, which caused manufacturers to significantly destock. Many manufacturers even shouted “no inventory, have to queue” during the peak season. The slogan, market supply exceeds demand, has made the market of conventional products such as polyester taffeta and pongee hot, but since this year, the market has not been satisfactory.
It can be seen from the data of sample companies monitored by China Silk City Network that in April, with the end of some production orders for years ago, many manufacturers said that it was difficult to balance production and sales. The increase in gray cloth inventory is accelerating. As of April 15, the inventory of gray cloth in Shengze area is about 36 days, compared with about 23 days in the same period last year.
“In previous years, in March and April, our factory would remove some inventory, and then in June -It is normal for inventory to accumulate in July, but our inventory is currently on an upward trend, and the factory now has a month’s worth of inventory.” said Mr. Yang, owner of a weaving factory in Wujiang.
It is difficult for the market to fully recover, but imitation silk has only been popular for a month!
It is understood that due to the dual negative factors of increased production capacity and shrinking terminal orders, the gray fabric market has been tepid, and the market is new. Orders were not placed as expected, making it difficult to reduce inventory.
Take imitation silk products as an example. The peak season cycle of imitation silk this year only lasted for about a month. There are not many hot products in the market. Except for a few varieties, the sales of other products are hot. The performance was mediocre, and the demand for products such as chiffon, hemp, and crepe was not fully amplified.
“This year, the sales of imitation silk in our factory were very good in the month of March. The orders have been lukewarm since then, and now I heard that the customers are also average. But the temperature is picking up, I guess. There are still opportunities for improvement in the market,” said Mr. Wang, who specializes in imitation silk in Shengze area.
In addition, last year’s mid-to-low-end products such as polyester taffeta and pongee , nylon spinning, etc. all performed poorly. It is said that the pongee series began to accumulate inventory before the Spring Festival last year. The growth rate of market production capacity has increased and the competition is fierce. However, the downstream demand has not increased in the same proportion, resulting in insufficient market share. The goods are relatively calm.
Many of the orders currently on hand by manufacturers are for orders received in March. New orders are slow in April, and domestic trade orders generally only start in July-August, so the orders are empty. The window period is longer than in previous years.
Profits have shrunk by more than half, making money difficult to make!
“Business is really not going well this year. Last year I could make money from anything I sold, but I can’t make any money from knitting anything this year. It’s good not to lose anything.” Mr. Qian, the owner of a weaving factory in Shengze area, cried to the author. According to statistics, the current daily profit of a polyester taffeta loom is about 30-50 yuan, while the profit in the same period last year was as high as 100-120 yuan. More than half of the profit has shrunk directly. This shows that the profit taking of water-jet looms very obvious.
In addition to water-jet looms, the profits of the warp knitting and circular knitting sectors also performed poorly. In particular, warp knitted products have a greater impact on the price fluctuations of raw materials. In addition, knitted fabrics have been tepid since the Spring Festival this year, which makes it difficult for related fabric prices to adjust with the rise and fall of raw materials. However, hidden costs such as labor, factory buildings, water and electricity, etc. Costs are rising year by year, resulting in shrinking profit margins for knitted products.
Some circular knitting machine manufacturers said that profit margins have been significantly compressed this year, and orders have been delayed. , can only reduce the operating rate to alleviate the pressure caused by inventory. It is reported that the operating rate of the weaving market has declined slightly recently. The current comprehensive operating rate in Jiangsu and Zhejiang is about 80%, among which Shaoxing circular knitting, Haining warp knitting and Changshu warp knitting all have different The degree of decline has weakened the overall market confidence.
Judging from the current market conditions, the factors leading to the decline in the operating rate are:
1. Reduced demand has led to some conventional varieties Sluggish sales;
2. A large number of cheap foreign gray fabrics have entered the market, exacerbating the imbalance between supply and demand;
3. Raw material prices remain high;
4. Worry about the psychological expectation that the market will continue to decline;
5. Continuous pressure from end customers;
Taken together, the textile market is still facing continued decline in demand, unclear prospects for Sino-US trade negotiations, shrinking end-use clothing demand and other unfavorable factors. Due to the impact, the textile market in the second quarter did not get off to a good start. It is extremely difficult for the weaving market to revisit the market situation last year!
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