Entering November, the weather finally turns cooler and winter officially enters. The sales of autumn and winter clothing fabrics are finally saved!
01 Autumn and winter fabric sales encounter obstacles
But everyone knows that this year’s market has serious overcapacity. Companies that make some differentiated products are fine, and the competition is not so fierce. But textile companies that make some conventional products will have a hard time. In addition, the weather has not cooled down, and the sales of autumn and winter fabrics are really hard to say. This traditional peak season is not hot.
01
Mr. Zhang’s company mainly produces pongee, which is a conventional product among conventional products. The current operating rate is about 70%, and will gradually decrease as business slows down.
Mr. Chen mainly sells gray fabrics such as Oxford cloth, Tencel cotton, and four-way elastic. He said that the factory’s current operating rate is 80%, and the sales volume of autumn and winter fabrics has not improved.
“We mainly make flat peach and slanted peach skin velvet series. Although the machine is fully operational, half of it is for orders and half is for inventory. It can take more than a month at most.” Mr. Cheng told the editor.
Currently, according to data monitoring from Silkdu.com, the operating rate of water-jet and air-jet weaving enterprises in Shengze is 73%, down 3.2% from the beginning of October. In fact, starting from the first half of this year, many manufacturers have begun to reduce their operating rates for high temperatures, May Day, Mid-Autumn Festival, National Day, and weekends. Anyway, they take holidays when they can, and find reasons to take holidays when they can’t. There are really no orders, and we don’t dare to stockpile inventory. But even if we are so cautious, the overall social inventory in the market is still high.
02Costs have dropped, but fabric companies are still losing money
Because of the intense involution, every meter of gray fabric is now sold at a loss. Instead, it is a list of some fabrics. Because some gray fabrics are bought from outside and processed, the cost is actually cheaper than what is produced by oneself, and on the contrary, one can make some money. This has to be said to be a kind of irony.
Recently, upstream raw materials have begun to decline, and raw material costs have been alleviated. However, at the same time, due to intense involution, in addition to manufacturers taking the initiative to lower prices, customers will also lower prices due to the decline in raw materials.
02
Mr. Zhang said that now every meter of gray fabric is sold at a loss. Instead, it is a list of some fabrics. Because some gray fabrics are bought and processed from outside, the cost is cheaper than those produced by oneself, but they can make some money. This is unacceptable. Not saying it would be a travesty.
Mr. Chen, a trader specializing in women’s clothing such as imitation silk and stretch fabrics, said: “Although the price of gray fabrics has dropped recently, customers are well-informed and know that raw materials have dropped. They will also lower the price when placing orders for us, so from a profit perspective Judging from the situation, there is still no change, and the profit point may even decrease.”
The pressure for repayment gradually increased at the end of 2003
The closer to the end of the year, the greater the financial pressure on companies. On the one hand, companies are tight on money now, and two pot lids may cover three pots, so they would rather hold off on giving money to ensure that they have money in their hands; on the other hand, with this year’s market situation, there are Some companies are indeed experiencing problems with their survival and are on the verge of bankruptcy or even have already closed down. Therefore, we see that after the market environment has finally improved for several years, it is beginning to be difficult to get payment for goods this year.
In order to maintain cash flow, when there is no demand, weaving factories do not dare to prepare too much goods for next year, for fear of losing their hands, and downstream companies do not dare to place orders. In the end, the operating rate keeps getting lower and lower.
03
Mr. Chen, who specializes in Tencel and Oxford fabrics, told the editor that this year there is mainly pressure on repayment. Our repayment cycle is 1-3 months, and it has generally been extended by 1-2 months. There are currently no effective measures. All we can do is wait for customers to pay.
“Our pressure comes from the pressure on payment and inventory. The payment is extended by more than a month and the inventory is also high, so we plan to take a holiday 10 days earlier than previous years this year in order to control the inventory.” said Mr. Xu, who specializes in home textile fabrics. .
The market situation this year is already like this. Will the market bottom out next year? Judging from the answers of textile people, they are not optimistic about the market next year. Judging from foreign experience, the country may also encounter pressures from inflation, labor costs, logistics and other aspects next year. These pressures will eventually be transmitted to the cost of the final product. For textile companies, this is also something that needs to be prepared for a rainy day.
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