There is such a weaving company that has been competing with the same fabric for the past three months. According to a relevant person in the company, this fabric is called four-sided elastic for machine bags. It was made when the machine was turned on at 100%, but now it is still made when the machine is turned on at 70%-80%.
According to reports, the four-sided elastic bag is made of nylon and spandex woven on a water-jet loom. It has the characteristics of soft and smooth feel, strong drape, and good elasticity. Because this fabric has less exposed spandex, it is more durable and less prone to deformation than other spandex fabrics, and is very popular among customers. According to customer feedback, this fabric will be mainly used to make outdoor functional clothing.
In terms of profits, as the popularity of outdoor sports has not diminished in recent years, the order volume of this fabric has been relatively stable. In addition, the orders are placed directly by clothing companies, and there are no middlemen to make profit, so the profit performance is acceptable. Although the price of fabrics has dropped compared with the previous period (the previous quotation of fabrics was around 7.5 yuan/meter, and the current quotation is about 7.3 yuan/meter), the overall market environment is sluggish, and conventional varieties cannot escape the fate of falling prices.
The startup fluctuates, order volume is the main reason
According to monitoring data from Silkdu.com, as of December 13, the operating rate of Shengze looms was 59.1%. Under the influence of the cold wave in early December, terminal demand improved moderately, downstream confidence recovered, and orders were placed one after another, driving the operating rate to rise. Affected by this, some weaving companies have postponed their holidays to mid-to-late December or even around New Year’s Day. However, the industry generally believes that this wave of phased improvements is not sustainable, and it is expected that the start-up rate will decline again in mid-to-late December.
Since the beginning of this year, the market’s overall operating rate has generally been at historically low levels. When researching the market, many companies said that this year’s order volume has declined to varying degrees compared with the same period in previous years, with the decline rate being around 20%-30%. Therefore, it is normal for the operating rate performance to deviate from previous years.
As the former “hidden champion” in the fabric industry, the sales situation of four-way stretch fabrics is not what it used to be. Even the “top” fabrics are no longer popular, and the situation of other fabrics is even more difficult. Due to the lack of order support, some weaving companies have arranged to suspend production and take holidays at this stage. The holidays are expected to be significantly earlier than in previous years. It is not easy for the above-mentioned companies to maintain the operating rate at 70%-80%.
Price involution, profits are no longer forced
Against the backdrop of high market inventories of gray fabrics, and with the weakness on the demand side yet to be effectively alleviated, conventional fabrics are forced to continue to inflate prices in order to maintain normal shipments, and “clearance” and “loss-making” sales occur from time to time. .
In today’s textile market, niche fabrics can still rely on their own added value to win by quantity, but large-volume conventional fabrics face the dilemma of difficulty in raising prices. It can be seen from market feedback that conventional fabrics that lack differentiation can no longer create more profits for fabric manufacturers, and may even cause fabric manufacturers to fall into losses.
According to monitoring data from Silkdu.com, due to the relaxation of domestic epidemic control, the flow of gray fabrics downstream has improved recently, the production enthusiasm of weaving factories has slightly rebounded, and the inventory of gray fabrics has dropped to about 38 days. But overall, the current market inventory of gray fabrics is still at a high level.
Although the general economic downturn has made the performance of fabric prices unsatisfactory, there are still some companies that can maintain sufficient profit margins. For example, for the above-mentioned weaving enterprises, although the unit price of fabrics has dropped by 0.2 yuan/meter, the overall order profits can still be kept within control because they have maintained good relationships with customers and reduced expenditures on intermediate links.
Postscript
With the gradual relaxation of epidemic prevention and control, the textile markets in various regions have been boosted to varying degrees, and the progress of the Spring Festival holiday has also been slower than pessimistic expectations. Faced with the repeated optimization of epidemic prevention policies, many textile people have begun to regain confidence in the market. As the end of the year approaches, let us wait and see whether the textile market will usher in a wave of “closed doors”!
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