“Red May” is really here!
Since last week, the quantity of goods in the gray cloth market has increased sharply, and the transactions are hot. The transaction volume of two major categories of gray fabrics, imitation silk and elastic fabrics, increased, and manufacturers’ inventories decreased.
01 Gray cloth sales are booming
01. Elastic fabric company
“Recently, about three trailers of goods have been shipped every day, which is indeed much better than at the beginning of May. Before, not even one truck of goods was sold in a day.” said a stretch fabric owner.
02.Chunya Textile Enterprise
A person in charge of a weaving company that produces pongee also said: “We are delivering goods every day. We shipped 700,000 meters of pongee in three days. The recent sales volume is acceptable.”
From the dictation of the cloth boss, we can indeed feel that the market situation has improved, and the number of gray cloth transactions has been impressive. But behind the busy shipment, Boss Bu was not too happy. It turns out that the sale of so many gray fabrics is just a matter of the cloth boss selling them off at a low price to remove inventory and collect cash.
02Manufacturers sell off at a loss
Take the recent orders made by the above-mentioned Chunya Textile boss as an example. He sells 300T pongee, but because the inventory has been rising recently, he sold the goods to relieve the inventory pressure and collect funds. At present, the price of 300T pongee gray fabric on the market is 1.6-1.7 yuan/meter, and the cost is 1.5 yuan/meter. The owner of the fabric is now selling it at a loss of 0.1 yuan/meter, just to collect cash. 700,000 meters, lost 70,000, but got 980,000 in cash. This cash can be used to pay workers and purchase raw materials to prepare for the next round of production. Otherwise, the gray cloth can only lie in the warehouse and sleep, and the cloth boss will be sad because he cannot pay the workers’ wages.
Nowadays, it seems that cashing out losses has become the only way for companies to turn around. But this is not the case in reality. Although cashing out at a loss can solve the immediate problem, it will destroy the market price and only cause a loss of future profits.
At present, the entire textile industry is still under great pressure to survive. At present, global liquidity is shrinking rapidly, the risk of stagflation in the world economy is increasing, and the triple pressure of shrinking domestic demand, supply shocks, and weakening expectations is superimposed, and enterprises are facing difficulties in production and operation. Household income growth has slowed and consumption has become more cautious. Affected by multiple factors such as supply chain shocks, the prices of upstream energy and raw and auxiliary materials have risen sharply, and the production costs of textile enterprises have increased significantly. Under multiple pressures, corporate profits are constantly being squeezed and capital chains are in jeopardy.
Of course, the recent orders for gray fabrics are not all companies selling goods, there are also demands for new orders. In May, when demand still exists, it is not recommended to sell goods at a loss. After all, the real off-season has not yet arrived. Once the market price is driven down, the off-season prices in July and August may be a mess.
Recently, as the weather gets warmer, the clothing industry has gradually become more popular. Many clothing wholesale markets across the country are crowded and busy. Clothing sales are good, and the demand for fabrics is also increasing. In the May season, most of the orders are re-orders, and new orders for the second half of the year have not yet been placed. Although most of the items are repurchases, there is demand for everything. Boss Bu works hard and can still take the opportunity to stock up.
Recently, due to policy influences, dyeing factory production has been restricted. This prompted some traders to start stocking up in advance, especially spot supermarket companies, which stocked up in large quantities and had sufficient inventory. As a result, the number of gray fabric transactions of weaving enterprises has also increased significantly.
Summarize
It is already mid-May, and the end of May and beginning of June will soon come. The traditional off-season is gradually approaching. There is still a risk of slowdown in the later period, and there is a possibility that gray fabric inventories will rise again.
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