Trending
The much-watched OPEC+ ministerial meeting will be held as scheduled on August 3. The OPEC+ alliance agreed to increase production by 100,000 barrels per day in September, the smallest increase in the organization’s history. The U.S. Energy Information Administration (EIA) announced that commercial crude oil inventories for the week of July 29 were 426.6 million barrels, an increase of 4.467 million barrels from the previous month, and an expected decrease of 1.5 million barrels. Affected by this, Brent crude oil and WTI crude oil immediately plummeted, performing a “big change” in the market. As of the close, Brent crude oil and WTI crude oil fell by 2.72% and 3.1% respectively.
Since the beginning of this week, under the influence of frequent international political events and turbulent geopolitical situations, subtle changes in the market, especially in terms of sentiment, have had a greater impact on the market. I found no. Recently, many textile bosses have lingering fears about the words “price” and “payment”. In the off-season, Boss Bu’s face changes when talking about money, and he shakes his head when talking about payment for goods. This shows that the textile industry has seriously lowered prices this year and it is difficult to get payment for goods. Cash in hand is king!
1 Price and payment affect each other
But now, there is an “infinite loop” phenomenon between price and payment. That is to say, the customer lowers the price, and the cloth boss negotiates the order at a profit, but the customer still defaults on the payment for a long time, and the cloth boss has difficulty in capital turnover, and has to cut the price and sell the goods. In this way, in the end, it becomes a profit reduction and a price reduction. No money is made, and even the payment for the goods cannot be collected! What a painful realization!
Mr. Tang, who owns 160 water-jet looms to make four-way elastic, pongee and other products, said: “It is really difficult to get payment for goods this year, and the arrears are serious. I started asking for payment at the end of July, and by the beginning of August I received one payment! Due to the last The monthly repayments are not good, so we can only continue to sell goods in cash this month.”
Mr. Weng, another textile boss who makes pongee, also complained: “Customers have been able to get goods recently, but the price reduction is very obvious. Last week, the gray fabric dropped by 0.05 yuan/meter, and this week it dropped by 0.02 yuan/meter. This pace of price reduction really makes my heart bleed, but if we don’t reduce it, we can’t do it. The inventory keeps weighing down the funds and we can’t move.”
Since the beginning of this year, all major conventional fabrics have lowered their quotations. Polyester taffeta, pongee, nylon and other gray fabrics have dropped by at least 40%. Many manufacturers said that this year’s prices are already the lowest in recent years. But in order to realize the inventory, it is still necessary to sell the goods. After all, no one is happy to make a loss-making transaction. “The current products basically don’t have big profits, but we won’t sell them easily.” said Mr. Wang, the owner of artificial silk for ten years.
2The debt period is extended
It can be said that “the market is also the market for success, and the market is also for failure!” During the interview, most bosses believed that the market is the most critical factor affecting receivables. The current textile market environment is not in good shape, and the phenomenon of “getting goods on arrears” is becoming increasingly serious.
After the sharp rise and fall of raw materials, it was difficult to boost the market due to weak market conditions, which resulted in slow withdrawal of funds from downstream customers and also slowed down the speed of customers’ payment of accounts. This year’s accounts receivable situation has increased significantly compared with last year, with the proportion rising from nearly 20% to 50%. “At this time last year, our billing period was about 1-2 months. Recently, it is about 3 months. Some old customers have longer periods.” A textile boss said. Under the weak market conditions, many textile bosses have relatively relaxed their requirements for receivables in order to successfully accept orders. “There are quite a lot of receivables now. If there are no arrears, there will be no business.”
In an increasingly fierce market, in order to expand sales and increase market share, companies adopt cash discounts and credit sales, which are the main reasons for the formation of accounts receivable. However, with the crazy price increases of labor, raw materials and other products, the profits of the textile industry are getting thinner and thinner. If a payment is not received, the profits for a year may be gone. Therefore, today’s textile workers have a higher degree of control over funds. As Manager Tang said, instead of selling cloth in debt, it is better to sell the goods in cash. The most secure thing is to have the money in your own account.
3. Does the market lack money or confidence?
Is this market short of money or lack of confidence? After getting in touch, I found that many textile bosses are “double deficient”! Nowadays, both domestic sales and foreign trade are in constant turmoil. Under the influence of the international situation, orders that should be placed may be canceled or delayed, and terminal demand is difficult to say.
However, what is supposed to come will always come. Textile bosses still have to keep a calm mind and guard their “ammunition arsenal” in order to break the deadlock when the peak demand season comes! Weaving is not easy, come on, weavers!
</p
