Time has come to the end of October, and the much-anticipated market rebound has not appeared after all, which means that the “Silver Ten” is about to leave the market sadly. Such an ending is very sad!
However, the textile market has revealed a trace of weirdness. On one side, companies are eager to “anticipate price increases”, while on the other side, some companies are “raising prices” to grab orders. Although the ideas and practices are somewhat diametrically opposed, this is also the current situation of the textile industry.
Hot-selling fabrics are hard to find and profits are getting thinner
Judging from the polyester production and sales data, since September, the increase in polyester prices has been behind the high production and sales. Combined with the frequency of raw material procurement by weaving companies (15-30 days), it can be inferred that there is a sentiment of buying up rather than buying down. Under the guidance of , weaving companies more or less have some high-priced raw materials in their hands.
On the one hand, production costs have increased, and it is natural for fabrics to follow suit. It is reasonable for textile companies to be eager to “anticipate price increases.” Furthermore, according to usual practice, the arrival of the peak season will drive the market to sell goods, and it is logical that hot sales will lead to price increases.
But contrary to expectations, market research shows that the current fabric prices are easy to fall but difficult to rise, and hot-selling fabrics are hard to find. A textile boss said bluntly: “The traditional peak season no longer exists!”
Mr. Lu, who specializes in outdoor functional fabrics:
“Our Nylon fabrics and Oxford fabrics are okay, but they are not popular. We definitely hope that the price of the fabrics can increase, but at this stage, the orders are all based on the volume, and we simply can’t sell them at a high price.”
Mr. Lin, who specializes in imitation memory fabrics:
“Currently, there are no products that are selling particularly well in the market. We only sell a variety of 75DT8 that has relatively good sales. If the price cannot rise, there is no longer the term ‘gold nine, silver ten’.”
Mr. Pan, who specializes in down jacket fabrics:
“The sales of our down jacket fabrics are pretty good, and the overall order volume is about 90% of last year. The market is too busy now, and no one is raising prices, so we can’t raise prices alone.”
Analysts from relevant sources said, “It’s not the customers who are pushing your prices, but your peers!” When “involution” strikes, in order to grab orders, situations such as low-price competition, low-profit sales, and loss-making orders are unavoidable. However, the pressure of rising costs needs to be absorbed by textile companies themselves, so the profits of the companies have become thinner.
The start-up is barely stable, and most of the inventory is mainly stocking up.
It is mentioned above that the textile industry is trapped in involution. Does it imply that insufficient orders are behind this? Then let’s take a look at the two key indicators of the textile industry – operating rate and inventory.
Monitoring data from Silkdu.com shows that since the “Golden Nine and Silver Ten” period, the operating rates of weaving companies in the sample have shown a trend of first rising and then falling, while the inventory trend has shown a first falling and then rising trend. From this point of view, although the textile market has recovered, it is not sustainable.
Mr. Lin, who specializes in imitation memory fabrics:
“In terms of startup, the current startup rate is still 100%. In terms of inventory, there are about 2 million meters, mainly imitation memory fabrics. If the subsequent orders are not good, we will consider reducing production.”
Mr. Lu, who specializes in outdoor functional fabrics:
“The current operating rate remains above 95%, which is the same as at the beginning of September. However, since the market has calmed down in October, we have gradually prepared some stock for regular products, and the inventory has increased by about 200,000 meters.”
Mr. Shen, who specializes in custom-woven fabrics:
“Our current operating rate is 80%, because we are making orders and have very little inventory. We usually reserve samples of some products or stock a small amount of some main products.”
It can be seen from the description that the operating rates of these surveyed companies are higher than the market level in the same period, and the inventory is relatively controllable. When asked about the order maintenance situation, they generally said that it can be maintained for about one month. If follow-up orders are not maintained smoothly, there will be plans to reduce production, but they will not use production inventories to barely support the start-up.
Since the beginning of this year, the orders of textile companies with sufficient customer reserves and high value-added products have been basically the same as in previous years. However, most of the companies that are susceptible to the impact of the general environment and have seen significant shrinkage in orders are small and micro enterprises. Affected by this, the polarization of the textile market has become increasingly intense.
There are still two months left before the end of 2023, but textile bosses have made completely different arrangements: some plan to actively participate in domestic and foreign exhibitions to develop new customers; some are preparing to speed up the research and development of new products and strive to restore profits; and means that in the future, payment collection will be the priority and account settlement will be the first priority.
However, no matter what kind of arrangement it is, it vividly reflects the survival and development of the textile industry!
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