Recently, the editor talked with several friends who own factories. Some of them said that the operating rate of looms has increased and the inventory has begun to decrease. It seems that the peak season has arrived and the “Golden Nine” is really coming. Yet?
Weaving companies are ready to move
As the rain continues to increase, the persistent high temperature has finally dropped, and the problem of power shortage has also been alleviated. This is the direct reason for the increase in the operating rate of some weaving enterprises.
But the editor also learned that not all weaving companies have reached full production capacity at once, and some companies still have doubts about the market in the second half of the year. There is already a lot of cloth in stock now. Increasing production capacity is “there is no turning back”. If the downstream demand is insufficient, it will become an excuse for price reduction.
But the factory is open, and it doesn’t work if it doesn’t start working all the time. Now that it doesn’t work, others have started working, and the workers have all left. If we want to resume production in the future, we may not be able to resume production.
So although some weaving companies have fully resumed production, a larger number of weaving companies are ready to move and are constantly testing the verge of relaxing production.
The soldiers and horses have not moved, but the food and grass go first
The principle of putting food and grass first before troops are deployed never goes out of style. The factory may not be opened first, but silk can be bought in advance.
8Month30, the average production and sales of polyester factories reached 290.5%, shocked many people’s jaws. Part of the reason for this is that it is the end of the month and some companies are restocking, but more textile companies are preparing ammunition for the “Golden Nine and Silver Ten”.
Of course, although weaving companies have replenished their raw material inventories, judging from what we have learned, the current mainstream strategy of textile companies is still to buy raw materials and use them as they please, adhering to the principle of “If you don’t buy it, I won’t buy it, I can still buy it tomorrow.” Drop 300” belief.
Weaving companies do not spend a lot of money on raw material inventory, so the raw material inventory of weaving companies is still at a low level. However, such a strategy also has risks. Once the market improves and a large number of orders are placed, the amount of raw material inventory required by weaving companies is expected to be very considerable, which is likely to cause polyester prices to rise. This may also be 8One reason why weaving companies buy more raw materials than usual at the end of the month.
Insufficient downstream demand
Enterprises that can produce at full capacity now naturally have their confidence. The two-level differentiation of textile enterprises this year is much more serious than in the past few years. A bad company can’t even sell cloth at a loss, while a good company has so many orders that it can’t keep up. But from the overall environment, supply still exceeds demand.
This can be seen from the financial reports of some clothing companies in the first half of the year:
In the first half of 2022, Meibang Apparel’s revenue was approximately 7.23 billion, a year-on-year decrease of 47.49%;The net loss was approximately 6.89 billion, and the loss expanded by more than 500% year-on-year;
Seima Clothing2022Year1-6 Monthly operating income56.41 100 million yuan, a year-on-year decrease13.43%;
Peacebird’s operating income fell 16.31% to 41.97 billion, and net profit fell 67.57% To1.33billion yuan……
In addition, large overseas supermarkets such as Wal-Mart and Target have also suffered from inventory problems and have begun to significantly reduce order placements, which has another major impact on demand.
To open or not to open, it’s too confusing
So the current problem lies here. There is a high probability that there will be seasonal demand, but due to the economic environment, these demands have shrunk significantly, and all textile companies can no longer be satisfied.
Textile is already a fully competitive market, and the information gap is very transparent. If everyone puts their arms aside and goes all out in production, it will intensify the situation of involution, and vicious competition may eventually occur. But we are not producing now because there are limited workers, and it may be difficult to produce in the future.
Textile enterprises also need to make decisions based on their own production and operation conditions, and what is best for them is the best.
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