Before you know it, the “Silver Ten” is coming to an end.
Judging from enterprise feedback, this October, the overall performance of the textile market was obviously unsatisfactory. Faced with the “failure” of the traditional peak season, textile bosses are increasingly confused. Where have the disappeared orders gone?
Exports are not optimistic, orders have shrunk significantly
First, let’s look at a set of official data.
Last week, the General Administration of Customs released a new round of export data. Data show that in the first three quarters of this year, the country’s textile and apparel exports totaled US$223.15 billion, a year-on-year decrease of 9.5%. Among them, textile exports were US$101.92 billion, a year-on-year decrease of 10.3%; clothing exports were US$121.23 billion, a year-on-year decrease of 8.8%.
It can be seen from the data that in the first three quarters, due to factors such as weakening external demand, overseas customers are reducing orders or delaying orders. In addition, with the rise of the textile and apparel industries in Pakistan, Vietnam and other countries, orders flowing to my country have gradually decreased. As a result, orders from textile companies that focus on foreign trade have decreased to varying degrees. Among them, a reduction of 10%-30% is the norm, and a reduction of 50%-70% is not an exception.
An industry and trade enterprise said that as a textile enterprise that takes into account both domestic and foreign trade, the most profound thing this year is the sharp shrinkage of foreign trade orders. Especially after entering the “Silver Ten” period, domestic sales orders are still picking up, but foreign trade orders have significantly decreased. As a result, our operating rate has dropped to around 70%, down 20% from the previous peak.
Monitoring data from Silkdu.com shows that as early as the end of September, the operating rates of weaving companies in the sample had already shown a downward trend. As of now, the value remains at 74.2%, which is a 2% decrease from the highest value in September.
Affected by the epidemic, people’s consumption habits have changed subtly, and consumers have more or less reduced clothing expenditures, making the overall recovery of textile and clothing terminal demand less than expected. In the absence of stimulus from consumer demand, it is expected that orders from textile companies will hardly improve.
Stealing orders, profits become the biggest victim
As we all know, this year’s textile market is experiencing “internal pressure and external pressure”, and the “culprit” causing this situation is overcapacity.
Because the textile market has been in a state of blind expansion for a long time, overcapacity is a hidden danger. As peripheral production capacity continues to increase, the living space of textile companies continues to be squeezed. But the market pie is only so big, and in order to gain more market share, “price wars” follow.
A fabric dealer revealed that fabric prices are now very high whether it is domestic sales or foreign trade. Often there will be more than a dozen quotes for an order. If you don’t make concessions on price and give up part of your profit margin, your orders will most likely be taken away by your peers. In the words of the customer, if you don’t do this order, someone else will do it.
Another textile company believes that today’s textile factories are basically raising workers. Affected by external factors, it is normal for customers to lower prices when orders reach a certain volume. Sometimes, thinking about the factory rent and workers’ wages, it is better to take overflow orders and lose a little profit than to stop the machine.
Market research also shows that since the beginning of this year, fabric prices have been mostly stable, with no “general rise” or “big rise”. When asked about the reasons, most textile bosses said that due to sluggish end demand, in order to maintain customers and effectively destock, fabric prices will not rise easily even if the price of raw materials increases. After all, when faced with the choice of protecting orders or profits, there is only one answer…
Taken together, even if the recovery of consumption is less than expected, rigid demand still exists. The polarization of the current market is a good illustration.
Although the traditional peak season performance is average, there is no need to be overly pessimistic. Develop customers through multiple channels and accumulate more cash flow. Only then can you better seize opportunities when they come!
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