In recent times, the textile market has been full of words such as “no orders” and “no profits”. The atmosphere of the entire market is pessimistic and lacks confidence. No, recently the editor also encountered a situation where a cloth boss received a low-profit order.
Low profits, long payment, cloth boss refuses to accept orders
An owner of a trading company that specializes in children’s clothing, strollers and other fabrics revealed: ” Orders have been stable this year, and the cycle is going on. The volume is quite a lot, but the profit this year is very low. Not long ago, there was an order for 3 million meters of coated Oxford cloth. The price given by the customer was too small, and it took 4 months to pay back the money. , I thought about it again and again but refused.”
After a detailed conversation, the editor learned that this order of 3 million meters of Oxford cloth needs PU coating, but the cost of PU coating has increased a lot this year, and recently it has The price increased by 1 cent. The owner of the cloth calculated the price and found that the final profit of this order may not be even 10%, while normal orders can reach 15%-20% profit point. More importantly, the payment cycle for this order is also longer than usual, taking 4 months instead of 2 months originally. The payment of 3 million meters of goods is in arrears for four months. For a small and medium-sized trading company, the financial pressure is still great, and it may also have an impact on later operations. Therefore, the orders received can only be abandoned.
In fact, the total orders this year have not been less than last year. It has increased compared to the same period. According to the survey, most companies said that the total order volume increased by 20%-30% compared with last year, and also revealed that January to June were better, and only July to August had fewer orders. It can also be seen from the data released by the Ministry of Industry and Information Technology that the overall operating situation from January to June was good. The Ministry of Industry and Information Technology released the operation status of the clothing and textile industry from January to June 2021. The industrial added value of textile enterprises above designated size in the textile industry increased by 9.6% year-on-year. The output of chemical fiber, yarn, cloth and clothing of enterprises above designated size increased by 17.1%, 17.8%, 11.9% and 20% respectively year-on-year. During this period, textile enterprises above designated size achieved operating income of 2,343.5 billion yuan, a year-on-year increase of 20.3%.
After the increase in raw materials, the price of gray fabrics remained unchanged
The difference is that this year, the costs of textile companies have continued to rise, and profits have dropped. If the price drops again, Boss Bu’s life will be difficult. Just like the above-mentioned Boss Bu, he is not short of orders but is short of money. If the capital turnover is easy, a 10% profit on this order is relatively acceptable. For weaving companies, a 10% profit point is simply high profit. Currently, many companies are selling goods at a loss or only selling at a profit of a few cents and 10 cents per meter.
Raw materials are one of the most important costs of gray fabrics. Recently, polyester filament has started to have weekly promotions. However, even if there is a promotion, it will be raised the next day, so its price is still relatively stable. But prices during last year’s pandemic have never returned. However, the selling price of gray fabrics has remained at the price during the epidemic. It is conceivable that profits are silently bearing the price increase. Take 75D chiffon as an example. Last year, the market price was 2.1 yuan/meter, and the price of raw material 75D/72F FDY was 6,100 yuan/ton. This year, the market price is 2.3 yuan/meter, and the price of raw material 75D/72F FDY was 8,200 yuan/ton. . In other words, the price of raw materials increased by 2,100 yuan/ton, and the price of gray fabrics only increased by 0.2 yuan/meter.
Not to mention the sky-high sea freight for foreign trade orders Like a mountain pressing on the textile people. Due to the impact of the epidemic, this year’s foreign trade exchange rate is also extremely unstable, which will also affect Boss Bu’s profits. Although exchange rate changes have a two-sided impact, most companies suffer losses. After all, it is not easy to grasp the rules of exchange rate changes.
Low-profit operation is the most important feature of the current textile market. The culprit causing this situation is still weak demand. In the absence of strong demand, everything loses the confidence to raise prices, and the bottom line of prices retreats again and again. Especially for weaving companies, in order to ensure the normal operation of the machines and ensure sufficient production volume, it is common to maintain capital or sell at a loss. The traditional peak season is getting closer and closer. I hope that with the increase in orders, weaving companies can gain the confidence to increase prices, change their humble attitude, build a price defense line, and strive to pack dry money into bulging goods in the second half of the year!
</p
