Introduction: Since last year, strict environmental protection inspections have been carried out across the country. Environmental protection policies have been tightened this year. Under strict environmental protection pressure, some backward production capacity in the weaving market has been cleared, and the supply and demand relationship has been improved. Although the peak season in the first half of this year has been postponed and only appeared in April, the peak season lasts for a long time. As of now (early June), some weaving manufacturers are still busy with goods and inventory remains at a low level.
In the first half of this year, everyone knows that the raw material market has not been very good. Many friends who are engaged in raw materials and futures in the upstream will come to understand the situation downstream.
In March, a friend asked the editor if the peak season had arrived? The editor told them that the market was a bit dull in March this year, and only imitation silk felt better.
In April, the editor said that the market is good now, and spring and summer thin fabrics are selling well!
In May, the editor continued to say that there were still a lot of goods in the market, and even the rag taffeta was sold out! It’s June, and upstream friends say it’s the traditional off-season. Can fabrics still be sold? The editor went on to say that manufacturers have been receiving fewer orders recently, but in terms of shipments alone, the market conditions are still okay.
Just because the editor says how good the market is, many people will probably question whether the editor is a professional troll. Now let us use data to speak and take a look at the overall situation of the fabric market since the second quarter.
As can be seen from the table above, whether it is month-on-month or year-on-year, most fabric prices have increased. In fact, from the perspective of raw materials, since the Spring Festival this year, the price of polyester filament has dropped by as much as a thousand yuan, but the price of fabrics has increased instead of falling. The reason for this is that I don’t need to say much. The most brutal thing to say is that the market is good. , the price can rise.
Let’s first look at the most intuitive market inventory issues:
High inventory and slow liquidity have been headaches for weaving manufacturers in recent years. However, the bull market in the fabric market in October last year greatly alleviated the problem of high inventory in the fabric market. For example, many manufacturers of polyester taffeta and simulated silk have low inventories this year. Some best-selling specifications such as polyester taffeta 210T and 290T, and manufacturers of simulated silk tangle, high twist, and high elastic series products are often over-sold, and downstream customers are queuing up to wait for goods. . According to the data monitoring of sample companies by China Silk City Network, as of May 31, the inventory of gray fabric weaving in Shengze area was about 35 days, a decrease of 2.8 days compared with the same period last year, and the inventory in the weaving market was at a low level.
Let’s take a look at the manufacturer’s startup operation:
In terms of startup rate, after the Spring Festival, although weaving manufacturers had many orders on hand, production did not gradually resume until the fifteenth day of the first lunar month due to problems with staff availability. After the Spring Festival, the upstream raw materials can be said to have continued to decline. The sharp decline in raw materials has hindered the market, and weaving manufacturers have started flexibly making arrangements according to needs. However, after April, the upstream raw materials have gradually stabilized, and downstream orders have also arrived one after another, and manufacturers have increased their production enthusiasm.
In general, the overall inventory pressure in the weaving market this year has eased compared with previous years, and manufacturers are more motivated to produce. In addition, since April this year, weaving manufacturers have been relatively busy with orders, making the overall market start-up at a high level. As of the end of May, the operating rate in Shengze was still around 80%. Compared with the same period last year, the operating rate this year was 7.4% higher.
After talking about inventory and startup, what is the manufacturer’s profit situation?
According to a friend of the editor who makes polyester taffeta, in the first two years, a loom could only earn 20-30 yuan for producing polyester taffeta, basically only the labor cost. Polyester taffeta machines have been very profitable recently. One loom can make a profit of hundreds of yuan, and a hundred looms can make 10,000 yuan. The profit is much better than before.
It is reported that since April this year, the fabric market has rebounded. With the support of downstream demand, gray fabric prices have been firm and upward, and manufacturers have strong bargaining power. Although the prices of upstream raw materials, whether polyester filament or nylon, have dropped significantly in the first half of the year, the cost side has been loose and fabric prices have been stable and upward, which has led to an expansion of fabric profits. It is understood that nylon fabrics were more profitable than polyester products in the first half of this year. Whether compared with the beginning of the year or the same period last year, the current profits of weaving companies are in a very ideal state.
The editor has listed so many things about inventory, start-up, and profit. In fact, he just wants to prove that the fabric market situation in the first half of this year is really good. However, because there are so many types of fabrics, it is impossible for every variety and every fabric company to sell well, so the editor can only give an overview. Although making fabrics is hard work, if the company you work for has smooth shipments, no inventory, and good fabric profits, wouldn’t you be happy if you think about it?
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