For most textile people, 2020 is a difficult day, and the market conditions are turbulent. Difficulties in recruiting workers, sharp rises and falls in raw material prices, and sharp fluctuations in exchange rates have plagued textile workers since the beginning of the company’s resumption of work. But as time goes by, textile workers gradually find that these problems that originally troubled them gradually no longer cause trouble, or in other words, they are no longer qualified to be troubled by these problems…
Workers: From “difficulty in recruiting” to workers’ holidays
In recent years, the difficulty and high cost of recruiting workers have been a major problem that has plagued weaving companies. When work starts at the beginning of each year, many weaving companies will put up recruitment signs at the factory door. The wages written on them are getting higher year by year, but even so, the recruitment problem is still becoming more and more serious.
The same was true at the beginning of this year. Affected by the epidemic, weaving companies generally had a backlog of orders and were in urgent need of resuming production. However, due to poor transportation, a large number of workers It is difficult to go out to work, making the resumption of work and production a big problem for enterprises. Some local governments even charter buses, trains, and even planes to help workers return to work. At the same time, they have also introduced a series of incentive measures to ease the difficulty of recruiting workers. The problem.
However, the recent situation is that a large number of weaving companies Workers have changed from two shifts to three to four. Some companies with high inventories but unable to receive orders have even begun to suspend production.
From the statistical data, the current operating rate of Jiangsu and Zhejiang has dropped to about 60%, and the operating rate of water-jet looms in Shengze has dropped to 60-70% The operating rate of Xiaoshao circular knitting machines dropped to 30% to 40%, the operating rate of Haining warp knitting machines dropped to around 60%, and the operating rate of Changshu warp knitting machines dropped to 40% to 50%.
It can be said that for most weaving companies, they no longer need to worry about the problem of not being able to recruit workers. This has to be said to be an irony.
Raw materials: from daily attention to indifference
For a long time, the price of raw materials has been directly related to the cost of gray fabrics , is an issue that weaving companies are very concerned about.
Every time the price of raw materials fluctuates, weaving companies have to think about whether to stock up on raw materials, because perhaps a single operation on raw materials can bring huge consequences to the company. Profit changes ranging from tens of thousands to millions of yuan.
In the past few years, due to the price increase of polyester yarn after the beginning of the new year, weaving companies gradually developed the habit of stocking up on raw materials before the holidays. However, in 2019 and 2020 After the beginning of the new year, the price of polyester yarn fell instead of rising. Especially this year, under the influence of the plummeting crude oil, the price of polyester yarn fell to an unprecedented low.
However, as time goes by, weaving companies start operations After the rate dropped, everyone became less concerned about buying raw materials. Even when crude oil surged at an epic level in early April because the production reduction agreement was about to be reached, polyester production and sales only exceeded 100% for three consecutive days, and then quickly dropped to 30-40%, and there was no improvement after that.
For weaving companies, if they can start production, they just need to purchase and use it as they please. If they can’t start production, they will stop production directly, and there is no need to use raw materials. Polyester yarn is now available The ups and downs of the stage seem to have little impact on them.
Exchange rate: without orders, fluctuations are useless
In the past, for textile companies engaged in foreign trade, the RMB exchange rate was always something they had to keep an eye on. This was related to whether a single order could make money. How much.
In March this year, as the U.S. stock market experienced an unprecedented 4th degree circuit breaker, a huge shock occurred in the international financial market, and the exchange rate of RMB against the US dollar also experienced huge fluctuations , originally it was big news that the RMB “broke 7”, but in this fluctuation, the RMB exchange rate against the US dollar even exceeded 7.1 for a time.
However, even such exchange rate fluctuations , there are still no ripples in the hearts of textile people. After all, there are no orders anymore, and there are not even people making inquiries. Even if the exchange rate drops to 10, is there a big difference from now?
Real-time released by Johns Hopkins University in the United States Statistics show that as of 6:30 on April 15th, Beijing time, the total number of confirmed cases of new coronavirus pneumonia in the world…There are 1,961,965 cases and a total of 125,476 deaths.
The new coronavirus continues to spread. In the face of the epidemic, various countries have launched different anti-epidemic measures. The governors of several states on the east and west coast of the United States recently stated that they will decide on their own when to lift epidemic prevention restrictions and restart economic activities; large-scale cultural events in France have been postponed until at least mid-July; the United Kingdom announced data on deaths outside hospitals for the first time; Turkey allowed Tens of thousands of prisoners are temporarily released; Russia may use military resources to fight the epidemic.
This epidemic is based on the overall downturn in the textile market in 2019. It can be said that It’s because the house is leaking and it rains all night. In the face of today’s unprecedented market situation, the focus of textile people has also changed.
Orders: Lack of demand, still needed Wait
For today’s textile companies, orders are definitely the primary concern. Orders represent demand and mean that inventory is no longer accumulated. , which means that the enterprise can continue to produce and operate normally.
But the fact is that the epidemic is still spreading, the number of confirmed cases worldwide has exceeded 2 million, and the turning point is far from coming; on the other hand, the domestic trade market has also emerged After stagnation, downstream traders and garment companies generally showed a wait-and-see attitude, and the terminal market showed no signs of recovery.
For weaving companies, it will take some time to receive a large number of orders again.
Cash flow: In addition to contraction or contraction
For all companies, cash flow is the key to whether the company can survive, and the collapse of some well-known large companies generally means It also started with the rupture of cash flow.
Currently weaving companies have a large backlog of cash flow in raw materials, and they have to pay a large amount of labor, water, electricity, rent, and raw materials every month. However, production The products that come out cannot be sold, and it is almost a situation of only getting out but not getting in. Therefore, more and more companies are choosing strategic contraction and cutting expenses in all aspects.
However, judging from the development of the global epidemic, it is difficult to see a significant improvement in the textile market in the future, and the cash flow of textile companies will only become worse in the future. The more nervous you become.
Editor’s note:
Of course, it is an exaggeration to say that today’s textile workers are indifferent to labor, raw material prices, exchange rates, etc. Some time ago, some cloth bosses were struggling with whether to stock up on raw materials. However, with the spread of the epidemic, lack of orders, high inventory, and tight cash flow, some changes in labor, raw materials, and exchange rates are no longer the focus of textile companies.
In this kind of market situation that has not been seen in decades, how to keep the company alive is the key to textile people now and for a long time to come. The top question on my mind!
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