The annual Dragon Boat Festival is ushering in again, and some textile workers are also ushering in the holiday. Originally, for textile workers, the Dragon Boat Festival holiday was almost negligible. Generally, only May Day and National Day would have holidays. However, in the past two years, there will be holidays regardless of major or minor festivals.
For downstream factories, such as weaving factories, printing and dyeing factories and other post-finishing plants, a holiday means a shutdown. So what does a shutdown mean?
The textile market has changed a lot from the initial forced shutdown to the current active holiday. In the past, we would never take a holiday until the Chinese New Year. Even if the market was not good, we would at most reduce production and not stop production. But now, production cuts are commonplace, and when gray fabric inventories are high, production will be suspended immediately.
In fact, this production concept is correct. Rational production and actively facing the traditional off-season are the “good recipes” for business operations. Unlike in the past, weaving bosses were ashamed to say that they were not doing well in taking orders, and had to keep the machines running at full capacity to get through the off-season. As a result, the inventory of gray fabrics was too high and the capital flow was difficult, putting ourselves in a difficult situation.
Some factories are celebrating holidays
Therefore, during this Dragon Boat Festival, some manufacturers will have a holiday, ranging from 1 to 3 days, mainly based on the number of orders received by the company. June is the traditional off-season, and production reductions and holiday operations have gradually begun. At present, manufacturers’ start-up operations are generally not high, and some are fully operational, but they are generally 60-70%, while the lower ones are already in the holiday stage.
“Since June, the market has begun to decline. Now I can’t place an order in a day, so I have to wait for the Dragon Boat Festival holiday. If it continues like this next month, I really need to consider suspending production and taking a long holiday.” A cloth maker specializing in imitation silk The boss said helplessly.
Gray fabric inventories rise in June
Entering June, as the conventional fabric market gradually weakened, many manufacturers accumulated inventory at an accelerated pace. According to the sample companies monitored by Silkdu.com, the current gray fabric inventory of weaving companies in Shengze area is 35.6 days, an increase of 0.7 days from the beginning of June. The current operating rate of weaving remains at 71.3%, which is very reasonable in the off-season. However, the operating rate of weaving companies has not reached 80% since the start of this year. Since the epidemic, market demand has dropped sharply. Weaving manufacturers have reduced their operating rates to reduce their own burdens. As a result, the operating rate of weaving manufacturers has been at a low level in the past three years. As the textile boss said, if it decreases again, it will be a holiday.
Throughout the past, during the traditional off-season every year, some companies were bound to reduce or suspend production. Although the policy has been liberalized this year and the overall order reception situation in the first half of the year is good, corporate profits are not good. At the same time, raw material prices fluctuate, but as they are still supported by the cost of crude oil, prices are always at a high level. In the off-season, operating costs are high and many factories no longer have much funds to purchase raw materials, so their enthusiasm for production has further weakened.
“Profits from this year’s orders are very small. After the Dragon Boat Festival, the market will officially enter the traditional off-season. The demand will be even less, and the price of fabrics may even drop. Now I just hope not to lose too much and can survive the holidays smoothly.” Three months.” A textile boss said sadly.
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This year’s off-season was actually relatively “friendly”. It started to subside almost in mid-June, and the market in May was unexpectedly good, leading to the “Red May” market. Presumably after the traditional off-season, the market in the second half of the year is even more worth looking forward to. The off-season is especially dominated by prototype development, which also requires a large amount of capital investment. After production reduction and suspension of production, more funds will be withdrawn, which is more conducive to focusing on development.
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