In just 3 days, the editor accidentally encountered a weaving company loading goods twice.
You should know that in the preliminary research, the company’s order-taking performance was not optimistic, and orders were once in a state of “non-acceptance”.
Looking at this lively loading scene, the editor couldn’t help but wonder, could it be that “Jin San” arrived as promised even though it was not too late?
As costs rise, who will pay for the rising prices of raw materials?
Since March, crude oil prices have plunged sharply, driving the polyester industry chain to weaken collectively. However, PTA has gone against the trend and gained popularity. At the same time, after PTA continued to rise, the cost pressure of polyester was further highlighted, and the news of “production reduction” of polyester factories also followed closely. Affected by this, the price of polyester filament has experienced a “three consecutive rises”.
After looking at the raw material side, let’s look at the fabric side. Judging from the survey results, boosted by declining inventories and rising costs, fabric prices have remained stable, and quotation increases are limited to individual varieties, and the extent is extremely limited. According to the current situation, it is difficult for hot-selling products to achieve large-scale price increases.
It can be seen that the momentum for the continued rise in raw materials this time is not strong. Faced with rising costs caused by rising raw materials, the fabric side has failed to successfully pass on the cost by following the increase. Therefore, in order to avoid risks as much as possible, most weaving companies have transformed their raw material procurement methods into on-demand procurement. No matter raising the quotation or reducing the price, it is not enough to drive a complete turnaround in polyester production and sales. Purchasing methods such as buying up rather than buying down, and hoarding raw materials in large quantities are gradually being eliminated by the market.
For example, the weaving company at the beginning of the article, in his view, has seen arbitrary price increases in the upstream sector and mediocre terminal performance. The biggest operating pressure still comes from funding. Under a series of pressures such as rising costs, extended payment cycles from time to time, and continued high inventory of gray fabrics, companies are really out of breath.
Compressing profit margins, having an order is better than not having an order
Through market research, we found that since March, the polarization of orders among textile companies has become more serious. Those companies that perform well in receiving orders can maintain their orders until the end of May, and some companies can even continue until the end of August; while some companies have orders. Due to the weak situation, some companies said that they may use production inventory to maintain operations in the future; the vast majority of companies have mediocre order performance, and they have lamented that “the traditional peak season no longer exists.” Judging from the composition of orders, the domestic sales market is relatively hot, while the foreign trade market is still not ideal.
A foreign trade company revealed that recently, it has received 4 cabinets of CEY fabrics one after another. According to the quantity of 50,000 meters per cabinet, it is already a relatively large order and deserves a good celebration. But when I saw the order price, I couldn’t help but laugh. The profit was really low. It’s not an exaggeration to say it’s a few cents business. However, fortunately, this customer’s payment was returned quickly.
The reality is so helpless. In the current market environment, having an order is better than not having an order. Especially in the conventional category, in order to grab orders and customers, “price wars” are everywhere. Some fabric quotations have no minimum but lower prices. Some people even said, “As long as you don’t roll it to death, you will roll it to death.” declaration.
Affected by the “difficulty in receiving orders”, the phenomenon of low-price competition in the textile market frequently occurs, and the curse of “slow peak seasons” has come true again.
Postscript
At present, the recovery speed of terminal demand is slower than expected. Most textile companies, fabric and clothing companies, and traders still maintain a cautious but optimistic attitude towards the consumer market in 2023. It will take time to restore business confidence and increase consumption. “The peak season is not prosperous and the off-season is not weak” has gradually become the market consensus.
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