Since July this year, as international crude oil prices have been rising, downstream raw material prices have continued to rise, and polyester filament prices have experienced a wave of “slow bull” prices. Although It doesn’t rise much each time, but it keeps rising. Due to the rapid expansion of peripheral production capacity, weaving companies are also more enthusiastic about polyester yarns and are more enthusiastic about stocking up. After late August, there have been multiple production and sales outbreaks.
After entering September, with the arrival of the traditional peak season of “Golden Nine and Silver Ten”, the upstream and downstream work together, PTA“A week of prosperity”400 span>, the price increase of polyester filament has also accelerated slightly.
The cost of raw materials, as the hard cost of gray fabric production, has increased in price, and it is the peak market season. Logically speaking, gray fabrics should also rise with it, but things are not that simple.
We are in a dilemma due to rising cloth prices
In recent years, weaving production capacity has expanded rapidly in peripheral and central and western regions. However, due to the economic downturn in traditional consumer countries such as Europe and the United States, market demand has shrunk significantly, resulting in a serious decline in overall foreign trade, resulting in an obvious overcapacity situation in the market.
Although the domestic trade market of “Jinjiu” has rebounded, with the optimization of domestic industrial chain and supply chain, the domestic trade market is increasingly favoring the “quick response” model, and the proportion of production is getting higher and higher. , the share of the traditional large order model is getting smaller and smaller. At present, this kind of large order is mostly done in the foreign trade market.
Therefore, although many textile companies said that they were reluctant to accept orders after entering September, many textile companies said that the market seemed to be no different from last month. The happiness is theirs and the sadness is theirs.
With overcapacity and limited high-end markets, a large number of textile companies that have difficulty receiving orders produce conventional “bulk goods” such as pongee and polyester taffeta. The advantage is that these fabrics are used in large quantities every year and have good market liquidity. Well, as long as the price is right, you can sell it casually. The disadvantage is that everyone thinks so. This “right” price makes it increasingly difficult for weaving companies to make money. Especially when the price of raw materials increases, this kind of homogeneous competition will make the weaving factory even more uncomfortable. It will be difficult to increase the price. If you increase the price and others do not increase it, your cloth will not be sold. If it does not increase, it will also be uncomfortable and the profit will be lost. It gets lower and lower, and there may even be losses.
When stocks run out, the price of cloth increases
Mr. Huang, who produces pongee, said that the operating rate of our factory is 8-9 and the inventory has been accumulated for two months. Although raw materials have been rising, our The price of gray fabrics does not dare to rise at all, so that we can barely achieve a balance between production and sales. We are using raw materials in stock that we bought at the end of last month, and they will be almost used up by the end of this month. If we sell them at this price, we may lose as much as we sell them. Therefore, Mr. Huang said: “When our stock of raw materials will be used up, the price of cloth will increase.”
Many textile companies have encountered the same problem as Mr. Huang. They rely on raw materials in stock to keep prices from rising. However, current weaving companies generally do not stock too many raw materials. Generally, a month is enough. When the inventory of raw materials is used up, the price will either increase, become inventory, or make a loss.
The price increase process may be “sniped”
But price increases are not a panacea. In addition to overcapacity, in the first half of this year, because a large number of textile companies adopted the strategy of small profits but quick turnover, there was a huge inventory of conventional fabrics on the market. The procurement cost of these inventory fabrics was extremely high. Low, once fabric prices rise, these fabrics are likely to “come back” and impact the market.
To reverse this situation, the rise in raw material prices needs to stop or the market needs to recover. However, it is difficult for raw materials to fall in the future. From the data, it is clear that the prices of raw materials have been rising, but polyester factories have been reducing production. The scale of production reductions of polyester companies in Zhejiang may exceed expectations, which is very likely to cause an imbalance between supply and demand and continue to increase prices. raw material.
In addition to hoping that the market will pick up, what else can textile people do?
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