Orders plummeted by 90%
“Our company mainly produces silk, rayon, acetic acid and other slightly higher-end fabrics, and they are basically exported to foreign trade. Mainly the United States. In previous years, our annual sales could reach more than 100 million yuan, but this year due to the severe pneumonia epidemic and the United States being the hardest hit area, our orders have dropped by more than 90%,” said a trader in charge. Moreover, their company has a large number of employees, and the company’s production costs are also high. However, the current turnover is difficult to ensure normal production and operations. They are currently trying to hold on. As for how long they can last, no one has much confidence.
With such a large order reduction, the company must inevitably be in a state of loss. Of course, they are not the only companies in this state, and there are still a large number of them, especially textile companies that specialize in foreign trade or account for a large proportion of foreign trade.
According to the data analysis of the National Bureau of Statistics, in the past two years, our textile industry The number of loss-making companies every month is relatively stable, roughly around 3,000. However, the number of loss-making textile companies has increased rapidly this year, reaching about 6,500 in February and March. Although the number of losses decreased slightly in April, the number has still not returned to normal.
Loss seems to be an inescapable problem in our textile industry at present. How to avoid losses or reduce losses has become a top priority for all textile companies.
Affected by the epidemic this year, the textile market is in an unprecedented off-season. Fortunately, the crude oil market has been stimulated by shrinking demand and price wars among oil-producing countries, and oil prices have rarely remained at historically low levels for a long time. Affected by this, the price of textile and chemical fiber raw materials also makes people feel that there is no end to the fall.
Although there is no order demand, the price of raw materials is low enough, and chemical fiber fabrics are also easy to store. Therefore, when most textile companies face weak market conditions, the first thing they think of is not to reduce operating rates and reduce costs, but to use lower raw material costs to reserve gray fabrics to wait for the market to improve.
However, not all fabrics are suitable for large-scale storage, especially high-end and unconventional fabrics. Generally, their demand is not large. At the same time, the storage requirements are high, which will naturally drive up the production cost. It will be difficult to quickly withdraw funds after the epidemic is over. Those conventional and ordinary fabrics do not have these problems. They are in high demand and have a wide customer base, and are suitable for quickly revitalizing the capital chain after the epidemic is over. Therefore, some factories, even some gray fabric factories that produce high-end fabrics, do not hesitate to use high-end equipment to produce low-end fabrics.
However, this textile off-season is a bit unexpected. It lasts too long and shows no signs of improvement. For textile companies, two or three months of high-load production and stocking are acceptable to most companies, but it would be a bit difficult to be in this state for half a year or even a year. So they adjusted their strategy again, from waiting for customers to place orders to selling to customers, especially old customers who have been doing business all year round. Because they already trust each other, and at the same time, these old customers who have been getting cloth all year round must understand that the price of gray cloth is now very low.
According to a trader, they have several fabric orders that they do all year round, but the colors are different and the fabric type remains the same. The gray fabric factory that supplies them has been in contact with them recently, asking them to take advantage of the current low price of gray fabrics to prepare more goods. Nowadays, the price of raw materials is low, and the price of fabrics is also low. This is known to all textile people. They are indeed a little tempted, and are planning to prepare tens of thousands of meters of gray fabric, waiting for the market to improve to expand their profit margins.
Many textile companies have experienced plummeting orders and large-scale losses, and they will continue to grow as the epidemic continues. Before the European and American economies recover, it will be difficult for foreign trade orders to meet the needs of all textile workers. Especially recently, the textile market has turned sluggish again. Although it is already summer, textile people are about to experience the most biting “cold winter”. </p
