At the end of July and early August last year, due to the sharp increase in raw materials in a short period of time, traditional textile clusters such as Haining, Changshu, Tongxiang, and Wujin issued a joint production suspension initiative, which temporarily touched the pain points of textile people and caused a stir in the textile industry. wide attention in the circle.
In fact, the rise in raw materials is only one aspect. The more important thing is overcapacity. In the past two years, the economy has The rapid expansion of the knitting industry has resulted in an oversupply of some conventional warp knitting fabrics. Some warp knitting companies are even operating at a loss and have serious inventory backlogs.
Does it feel familiar? Yes, these are all problems that water-jet weaving companies are encountering now.
Judging from the results learned from the market, some of the weaving factories in peripheral areas such as Anhui and Northern Jiangsu are already in a semi-operational state, and the operating rate has dropped to 70%. Haining warp knitting has also There was no relief so quickly, and the operating rate dropped to 50-60%. Even the traditional Jiangsu and Zhejiang textile clusters, Tanqiu and Hengfan manufacturers that produce conventional products and have relatively old machines have stopped production or are planning to stop production. state.
However, because the number of weaving companies is too large, further accurate data is difficult to obtain, but we can get a glimpse of the leopard from some current phenomena in the market and draw some general conclusions.
Polyester production and sales fell to the bottom, lower than the normal demand to maintain normal operations
Polyester production and sales are most closely related to terminal weaving. On the one hand, weaving requires raw materials, so polyester production and sales are the most direct reflection of the operating rate of weaving companies; on the other hand, they can be purchased from weaving companies. Generally speaking, if they are optimistic about the future market and have sufficient orders, some weaving companies will purchase more raw materials than usual at one time to avoid the risk of rising raw material prices.
So how are the recent polyester production and sales? Let’s take a look at a set of polyester production and sales data monitored by China Silk Capital Network.
On July 3, polyester production and sales were 10-20%; on July 4, polyester production and sales were 10-20%; on July 5, polyester production and sales were still 10-20% .
Weaving companies generally have two ways to purchase raw materials, one is to buy as you go, the other is They are purchased according to the fluctuations in raw material prices, and each has its own advantages.
In most of May and June, the price of polyester raw materials fell slowly. At this time, a large number of companies chose the buy-and-use method to purchase. At this time, polyester production and sales basically maintained at 40% to 60%, 70% to 80% in good times.
Even though polyester production and sales ushered in a peak of production and sales at the end of June, companies that buy and use them still need to continue to purchase raw materials to maintain production. The production and sales of 10% to 20% for several consecutive days not only prove that the weaving bosses are very optimistic about the market outlook, but are also significantly lower than the normal demand for raw materials needed to maintain the operation of the machines. This proves from the side that some machines in the market are already in a state of decline. Discontinued status.
Faced with huge financial pressure, it is a helpless move to reduce the number of workers to start operations
Last year’s raw materials rose so crazily. On the one hand, it was due to the mentality of buying up and not buying down. More importantly, the market in the first half of last year was so good that the weaving companies had all their stocks exhausted. There are new orders on hand and the financial situation is very good.
PTA fell sharply.
On the one hand, this is because weaving companies have poor judgment on the market outlook, and on the other hand, it is also because the capital chain of some weaving companies is now very tight.
The capital chain is tight for the following reasons:
1. Inventory is too high. This is the most direct reason and the most unexplainable reason. There is overcapacity and there is not such a big demand in the market. Traders have also stocked up the goods they should have stocked at the lowest price before. Basically, the cloth produced in a short period of time is All are in stock.
2. Pressure on accounts receivable. When business is good, just take cash for goods. You also need to consider the relationship and whether you are willing to do it. When business is bad, the payment cycle may be as long as two months. It is so true.
3. Foreign investment. Many companies that have invested in expanding the production capacity of water-jet looms in peripheral areas currently have very tight capital chains, with hundreds of millions of real money.After entering, most of them are burdened with a lot of loan pressure.
4. Environmental protection, safety supervision, etc. In the past two years, environmental protection and safety supervision have become more and more stringent, and more and more investment has been spent to meet the requirements, but we have found that there are fewer and fewer complaints. Why? Maybe you are used to it.
With such a tight capital chain, the requirements for cash will become higher and higher. Although raw materials are cheap now, they still cost money. Anyway, the fabric produced will not be sold for a while, so we can only start work at a lower price.
Various signs indicate that the wave of production shutdowns by weaving companies in July has indeed come. The price of raw materials this year will not be as crazy as last year, and there may not be a joint production suspension initiative, but the scale of the suspension may exceed last year. This is the pain that overcapacity will inevitably bring, and I hope the bosses can survive it. </p
