In the blink of an eye, more than half of August has passed.
As the traditional peak season “Golden September and Silver October” approaches, the industry is extremely concerned about whether the textile market can get out of the off-season and whether the market will pick up as expected. During the interview, a textile salesperson said that the textile market did improve in early August, but now it has faded away. This short-term recovery has not been effectively extended.
Facing the current market trend, the salesman sighed.
Foreign trade is not strong, and it may be difficult to regain its former glory
It is understood that this company mainly deals in polyester woven products and is a textile company focusing on foreign trade. Since the products operated are conventional varieties, such as polyester taffeta, polyester pongee, etc., and most of the orders are in the form of running quantity. Therefore, the company’s gray fabric inventory is also quite amazing, and has been maintained in the range of 10-20 million meters for a long time.
The salesman revealed, “When the market is good, it is normal for daily shipments to be more than one million meters, and even when there is insufficient inventory, it is necessary to transfer goods to peers. I have been in the industry for more than 10 years, and the best moment for performance should be 2021. In October. In just 15 days, 20 million meters of fabric were sold. Unfortunately, according to today’s foreign trade situation, it will be difficult to reproduce this glory.”
The latest data shows that my country’s textile and apparel exports declined again in July. In terms of US dollars, textile and apparel exports fell by 18.3% year-on-year in July, and the cumulative year-on-year decrease from January to July was 10%, and the decline expanded by 1.7 percentage points from the previous month. From the perspective of export commodity categories, textile exports continued to shrink, with exports falling by 17.8% year-on-year and 3.6% month-on-month.
As we all know, the textile industry has always relied on “seventy-percent of foreign trade and three-thirds of domestic sales.” Since the beginning of this year, orders from textile companies focusing on foreign trade have shrunk to varying degrees. Survey results show that in the first half of the year, there are many textile companies that have experienced a 30%-50% reduction in foreign trade orders. A reduction of more than 50% is by no means an exception. Even some industry leaders are not immune.
Overcapacity and involution have made profits even thinner
In recent years, the textile industry has experienced rounds of crazy expansion, and today’s overcapacity has been formed step by step in this way. Take the above-mentioned textile company as an example. As early as 3-4 years ago, this company moved its weaving factory to Anhui. The number of looms has also increased from more than 100 to more than 300, and the number of looms has doubled.
It is understood that this situation is extremely common in the relocation of production capacity. In addition to the continuous expansion of peripheral production capacity, the upgrading of textile machinery cannot be ignored. With the putting into use of high-speed looms, the output of weaving enterprises continues to rise, and the oversupply situation may be difficult to alleviate in the short term.
Among them, unconventional fabrics have the greatest impact. This type of fabric is low-priced and large-volume, and is involved in most textile companies on the market. Coupled with the lack of technical content of the products themselves, the differences between merchants are minimal. Therefore, in order to obtain more orders, textile companies can only be forced to start the involution mode.
The salesperson of the company said that we basically use sizing fabrics. If we make export orders, the quality of this kind of fabrics will be more stable, but the price will be 0.03-0.05 yuan/meter more expensive than ordinary ones. However, profits are really not optimistic. Fabric prices cannot rise. Customers also like to use the prices of ordinary goods to lower prices. For example, something that used to sell for 1 yuan/meter may now only sell for 0.95 yuan/meter.
Price wars are raging, making the already meager profits of conventional fabrics even worse.
Taken together, whether the “Golden Nine and Silver Ten” can come depends on whether foreign trade orders can pick up effectively. Since the involution environment cannot be improved, textile companies can only respond by changing themselves. Whether it is increasing customer acquisition channels or innovating products, as long as it can increase orders, you should probably try it.
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