The “Silver Four” has just kicked off, and crude oil has acted out of common sense, driving the polyester industry chain to a collective boom.
This wave of growth has caused mixed feelings in the textile industry. Some textile bosses even lamented: “The current market situation can no longer bear the ups and downs of raw materials. It is best to maintain a stable situation.”
I still remember that a certain simulated silk weaving company tearfully refused to accept an order in early March (Will the 150,000-meter order be accepted? The weaving company cried: It’s really too late!). After one month, what is the state of his family?
1.5 million meters → 700,000 to 800,000 meters, inventory fell
In early March, when we conducted market research, the weaving company’s gray fabric inventory was maintained at about 1.5 million meters, and the inventory was mainly in hemp, satin chiffon, peach skin and other varieties. The person in charge of the company analyzed that according to previous years, there will be no backlog of inventory of these fabrics from January to May. No, in just one month, the company’s gray fabric inventory has dropped to around 700,000-800,000 meters.
According to monitoring data from Silkdu.com, since mid-March, weaving companies in the sample have gradually started to destock gray fabrics. As of April 7, the gray fabric inventory of the weaving companies in the sample remained at about 34 days. According to past practice, a decrease in gray fabric inventory means that market orders are in good condition and fabrics are flowing smoothly. However, this inventory reduction was not driven by the sales level, but was caused by traders hoarding goods.
As the demand for textile and apparel in the United States and Europe declines, the shortage of foreign trade orders has become a fact, and domestic sales orders have gradually attracted high hopes from textile companies. Especially after the epidemic is relaxed, optimistic expectations have caused traders to prepare goods in advance. After entering mid-March, the performance of the textile market was not as good as expected, and the continuity of follow-up orders was insufficient. Many gray fabric companies reduced prices and sold goods. Buying at bargain prices made traders enthusiastic about stocking up. This also caused “problems” in the textile market. The market conditions are average, but the dyeing factory is experiencing a liquidation.
At present, we can only confirm that the inventory of gray fabrics in weaving enterprises has dropped significantly, but it is still unclear to which link the reduced gray fabrics will be circulated.
Prices cannot rise, and we dare not stock up on raw materials.
Generally speaking, the cost side and the demand side are the key factors affecting fabric price changes.
I still remember that in early March, due to the hot market sales, the price of the company’s stretch satin gray fabric rose from 4.0 yuan/meter to 4.3 yuan/meter. In recent times, raw material prices have been rising. Let’s take FDY150D as an example. The price of this variety was 8,300 yuan/ton on March 6, and the price quoted on April 7 was 8,600 yuan/ton. Can the raw material price difference of 300 yuan/ton drive the price difference? Fabric prices rise?
The answer is no. The weaving company reluctantly said that the increase in raw materials this time will most likely have to be absorbed by the weaving company itself. At present, the textile market has serious overcapacity, and downstream companies are unwilling to pay for price increases. It can be said that if you increase the price, customers will immediately purchase from companies with lower quotes. Once customers are lost, the actual losses will be even greater.
In response to the increase in raw materials, the company not only reduced its inventory of raw materials from the original 15 days to about 10 days, but also became more cautious in accepting orders. According to reports, at present, it only dares to accept orders for conventional varieties. A while ago, it once again rejected an order of 200,000 meters for unconventional varieties. Although the company’s current order volume can only be maintained until mid-May, the weaving company itself is relatively passive in terms of payment collection. Nowadays, the cost pressure is so great that if customers cannot achieve 100% delivery of unconventional varieties, the original The order will be converted into inventory, and not only will the profit be difficult to guarantee, but there will even be a risk of loss.
Postscript:
Through research, we found that if raw materials continue to rise, some weaving companies will include production cuts and holidays in their plans. The decline in weaving start-up rates in early April is the best proof. Faced with the extreme tension between the demand side and the cost side, the editor can only say, “It’s not easy to live, but do it and cherish it!”
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