No one can understand the suffering of textile workers in 2022. Domestic trade encounters the epidemic, and foreign trade orders reverse flow to Southeast Asia. Now with the high temperature warning, the stagnant textile market has entered the off-season.
The market is deserted and construction starts are reduced
Since the epidemic in Shanghai this year, orders on the market have begun to decrease. However, there are so many textile companies in Jiangsu and Zhejiang, but the number of orders has dropped significantly, causing some textile bosses who could not receive orders to directly fall into desperate situations. If the startup rate is high and no one buys it, then it is better to lower the startup rate. According to data monitoring from Silkdu.com, this week the weaving startup rate in Jiangsu and Zhejiang has been reduced by 1% to about 65%.
With the traditional off-season and the upcoming high-temperature season, Boss Bu is increasingly willing to reduce production and take holidays. Currently, there are more companies that eat porridge than meat-eating companies on the market. Most companies only maintain some loose orders and small orders. “Originally, we have maintained 70% operating capacity, but now our factory is still working five days a week and two days off.” This is the sigh from a boss who has no orders in hand. If we continue to produce blindly, inventories will become higher and higher, and more and more working capital will be occupied. In this case, reducing work hours and taking holidays have become the first choice of many bosses.
Missing orders and high inventory levels
Orders from weaving manufacturers are very poor, and some manufacturers even have no orders, so traders will not be any better. Both domestic and foreign trade orders have declined, causing the contradiction of overcapacity to ferment again, which has been experienced in the past two years. With the expansion of production capacity, conventional products are now everywhere on the market, but downstream terminal demand is shrinking.
They say the market is bad, but what exactly is the situation like? Let’s look at it through three different lenses:
1
“We now have 5 million meters of inventory in the factory. After all, what the machines are doing now is all in inventory. Without orders, there is nothing we can do.” said the owner of a weaving factory.
2
“There are some orders now, but they are all small orders, just a few kilometers, and they are all duplicate orders. But it will be good if we can continue to maintain orders.” said a domestic trade boss.
3
“The continuity of orders is average, almost until the end of the month, and since foreign trade orders now have to wait for the clothes to be made before we can get paid, we are under great financial pressure.” A boss who specializes in foreign trade said.
And because there are no orders, the current weaving companies can only produce inventory. In addition, due to the impact of the epidemic in the first half of the year, the peak season is not prosperous and many inventories are not sold, further exacerbating the problem of overcapacity, even if the upstream raw materials end changes throughout the day. , the fluctuation range of downstream prices is very small. Entering July, the production and sales of textile enterprises are difficult to level off, and inventories are showing signs of rising. According to data monitored by China Silk City Network, the inventory of gray fabrics in Jiangsu and Zhejiang is about 36.8 days.
The market is looking forward to the “Golden Nine and Silver Ten”
It is precisely because we are in the off-season of the industry and the market is deserted that everyone has long been accustomed to it. Therefore, regarding the market outlook, many companies have said that although there are no orders during the off-season in July, the “Golden Nine and Silver Ten” are still worth looking forward to, because orders have been increasing this year. There is no large-scale release. If the situation is ideal, the number of samples will increase from the end of August, and the market will gradually improve.
1
Mr. Meng, who is mainly engaged in domestic trade orders, said: “We have a lot of preliminary development and proofing, which is also time-consuming. From proofing to placing an order, it takes several months. The overall market in July is definitely slow, and it should be from the end of August to the beginning of September. It will get better slowly.”
2
Mr. Shen, who specializes in linings, said: “The market has been a lot sluggish in July. It’s uncertain when the market will improve, but there may be some market trends in linings in September or October.”
3
Mr. Zhang, who is mainly engaged in foreign trade orders, also said: “Although there are not many samples and proofing now, the market will feel weak in July, but it should really improve in September and October.”
Judging from the feedback from the survey, this year’s textile people can only say:
The peak season coincides with the epidemic,
High temperatures are coming to usher in the off-season.
Where is the way out?
Stay tuned for the Gold Nine and Silver Ten!
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