When the editor visited the market recently, I heard many fabric bosses saying that there have been more people coming to see the goods and making inquiries recently, and they are all asking about autumn and winter fabrics. Is the market in the second half of the year finally coming?
Lower startup, lower inventory
In the past period of time, when asking Boss Bu about the recent market conditions, they would almost always say that there was no market at all recently, very indifferent. When asked what was the biggest pressure in the first half of the year, their answer was often that there was a lot of inventory and a long billing period, which had a great impact on the cash flow security of textile companies.
Therefore, in order to ensure cash flow, many textile companies have adopted a strategy to reduce inventory this summer. Some textile companies choose to sell goods at low prices, and some choose to reduce the startup rate. In short, they do not put too much cash on inventory.
According to data monitoring from the China Silk City Network, the current operating rate of looms in Jiangsu and Zhejiang is 68.5%, which is only higher than the same period in the past few years and is only higher than 2022.
The average inventory days of weaving enterprises is 36days, which is not too high compared with the same period in previous years.
Overall, destocking has indeed had a certain effect. For weaving companies, “packing lightly” can give them greater room for adjustment in their production strategies in the second half of the year.
Rising prices of raw materials, good production and sales
Contrary to the declining operating rates and strictly controlled inventories, raw material prices continue to rise.
The biggest driver of this round of rising raw material prices is international oil prices. AprilIn April, international oil prices fell for four consecutive weeks. In order to stem the decline, oil-producing countries led by Saudi Arabia and Russia have repeatedly announced production cuts, thus boosting oil prices. Brent oil has gone from less than 70US$/ barrels, and US oil has been as low as 66USD /barrels, rising until Brent oil currently exceeds 82USD/barrels, US oil exceeded 78US$/barrels, the increase exceeded 17%.
Affected by this, PTA rose more than 600 points. The increase in polyester filament was slightly smaller, but there are also strong expectations for price increases. . This price increase expectation has brought about production and sales that exceed expectations. From the middle of 6 to now, there have been 5Daily production and sales exceed 100, with the highest production and sales reaching 386%.
Although everyone says that the market is weak, weaving companies are still unambiguous when it comes to buying raw materials. Because of the destocking strategy, although the profits of weaving companies are low, their cash flow is relatively healthy, which can also support them to stockpile some raw materials for the second half of the year. Prepare for production.
Has the order come? Tathagata!
The inventory is low, the raw materials are available, and what we are waiting for is the market situation in the second half of the year.
If we want to say what the textile market lacks most at this stage, it is confidence. The lack of confidence has caused clothing companies to dare not place orders. Weaving companies are also afraid of payment problems and dare not accept many orders. It is understood that many textile companies are afraid of payment problems. The company is no longer accepting new customers. If new customers want to place an order, they can only pay first and then receive the goods. At this time, reliable new orders are very important.
But have new orders come? To use the current popular word, it is “Tathagata”!
Let’s say it’s coming, but you can’t say that. At this stage, there are still more people asking for prices and looking at samples, but it’s almost August, and generally the market conditions in the second half of the year are about to come. now;
You may say it has not come, but the prices of gray fabrics that have not been moved for a long time are indeed rising. Fabrics commonly used in autumn and winter such as polyester taffeta and nylon spun have been unable to rise due to overcapacity even if the price of raw materials continues to rise. Now If it can rise, it shows that the demand is really there.
The current orders are at such a stage that they are about to be placed, but there are various signs that the market is indeed ready to move in the second half of the year.
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