September is approaching. Some cloth bosses told the editor that the number of orders in the market has increased significantly, and the queues at the dyeing factory have been taking a long time. Of course, they are not very happy. What is going on? What’s going on?
The quotation cannot be increased
The current textile market is a proper buyer’s market. Customers can make quotations based on the company’s cost line. Do you think the profit is low? Do you agree? Then the customer placed the order elsewhere.
A weaving boss said that if the profit of weaving was 5-10% in the past, it is difficult for the profit to exceed 2% now. Counting some miscellaneous expenses, it is basically testing the edge of the breakeven line. If there is a slight surprise, There will be losses.
Of course, customers’ price reduction is one aspect, but customers themselves are also under great pressure. No matter what the circulation process is, consumers will always foot the bill in the end. If they want to increase prices, the price will eventually be raised on consumers. But the situation this year is that consumers have no money, foreign trade is not good, and foreign trade customers with deep pockets are now aggressively lowering prices, resulting in a lack of room for price increases in cloth quotations.
The game between raw materials and weaving companies
Whether the price of cloth will rise is another matter. Now that the peak season is coming, it is obvious that the previous rising trend of crude oil has stopped, and the raw materials still say that I will rise first.
First, PX rose, and then PTA and ethylene glycol said that no matter who raised the price, I would come to help. Only polyester filament is more “reserved”, looking like it wants to increase prices but does not.
Of course, it’s not that polyester yarn doesn’t want to increase in price. As mentioned above, weaving companies’ current weaving profits are only about 2%, and their ability to resist risks is extremely low. Moreover, under the involution market, the bargaining power of textile companies is not very good, even for raw materials. If the price increases, the price of gray fabrics and fabrics will also be difficult to increase. This is equivalent to cutting off the original 2% profit.
It turns out that 30% of companies may make some small profits, 50% of companies can maintain capital, and 20% of companies may lose money. If profits are further compressed, perhaps 10% of companies will make money, 50% of companies will maintain capital, and 40% of companies will lose money. If the loss is too large, the natural willingness to produce will be low, and the operating rate will even fall instead of rising.
Therefore, at this stage, the polyester factory can only test the market carefully, and wait for the market’s reaction when prices rise slightly each time. They are afraid that the sudden increase will scare the factory into suspending production, and thus it will not be able to sell its own silk.
The more orders, the less profit
However, according to the rules of the market, once the demand really picks up during the “Golden Nine and Silver Ten” periods, and buyers and sellers shift gears, the price of cloth can still rise. In previous years, when the market was bad, the market also developed in this way, and the market will slowly return to normal.
However, there is another variable in the market this year, which is a group of “mysterious” buyers. These buyers also have very clear purchasing ideas. As long as the price is cheap enough, they can eat whatever the quantity is. God knows how much fabric they bought in total throughout the summer, which resulted in the accumulation of a large amount of fabric in the circulation chain. Once the price of cloth shows an upward trend, these cloths may come back again.
When the cost of raw materials increases by 2 cents, the price of cloth can also increase by 2 cents. But after the price of cloth rises by 10 cents, the fabrics that were originally hoarded will be put out to compete because they are profitable. The cloth is all the same. Therefore, weaving companies can only sell at a ten cent increase in price, otherwise they will not be able to sell.
Therefore, there may be a vicious circle in which the more orders there are in the market, the less profits will be made.
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