Entering August, textile-related listed companies have successively disclosed their first-half performance reports. After sorting out, it was found that shrinking external demand has led to insufficient orders and double-digit net profit declines for listed textile companies. Faced with the severe market situation, even industry leaders are difficult to hand over satisfactory “answer sheets”. The situation of small and medium-sized textile enterprises can be imagined.
The off-season effect continues, and order volume is generally small
July-August is the traditional off-season for the textile industry. At this time, consumer demand tends to be flat and temperatures remain high. It is expected that textile companies will experience reduced orders and declining operating rates.
Mr. Xu, who specializes in nylon four-way stretch:
“We are a fabric spot supermarket. Currently, the number of people cutting samples and making inquiries has increased, but the actual order placement situation is not ideal. The order volume is generally small, with orders of a few hundred meters or several thousand meters accounting for the majority, and orders of tens of thousands of meters. Orders come in occasionally.”
Mr. Shi, who specializes in nylon spinning:
“The operating rate of our factory is quite stable, maintaining around 80%. The orders are mainly for 380 and 400 nylon yarns, but the order volume is not large and can only be completed by the end of August.”
Mr. Lu, who specializes in stretch fabrics:
“We are doing spot goods, and orders are continuous. Products like T400 and T800 are shipped every day. Currently, the operating rate of cooperative factories is around 60%. The phenomenon of peripheral production reduction is more obvious, and the maximum operating rate is around 50%.”
According to convention, during this period, weaving companies will more or less reduce production. Even if the operating rate only maintains 50%, it is reasonable. It is also reasonable for some companies to even suspend production for a period of time in the name of a high temperature holiday. . After all, the emergence of these situations is ultimately due to insufficient orders.
It is reported that major brands are gradually advancing the preparations for autumn and winter ready-to-wear. However, from the current point of view, relevant orders have not yet been implemented in large quantities, and the textile market is still dominated by “small batch, multi-batch” orders. As for whether they will stock up in advance, most textile companies have said they have no plans for the time being. Only some spot supermarkets have the intention to stock up and have taken action.
Fabric prices are fine-tuned, and profit margins are hard to be optimistic about
Since July, thanks to the strong support from the cost side, polyester filament has started to rebound. After a month of rising and falling, the price of mainstream polyester varieties has increased by more than 300 yuan compared with the beginning of the month.
Preliminary research shows that in the first half of this year, fabric prices seem to have got rid of the control from the raw material level, and have gone through a wave of independent market trends of “you raise yours, but I will remain unmoved”. However, as the off-season deepens, the “unusual” trend of raw materials has caused the originally stable fabric prices to loosen, and many varieties have started to follow the rising mode.
Mr. Shi, who specializes in nylon spinning:
“Recently, the price of nylon fabrics has been increasing, so our fabrics should follow suit. The cost has increased, and price reductions occur frequently. In terms of profits, we can only say that it is average.”
Mr. Zhu, who specializes in four-sided bombs:
“Although the price of fabrics has increased slightly, it cannot support the increase in raw materials. Currently, there is no profit margin for nylon and fine-denier products.”
Mr. Lu, who specializes in stretch fabrics:
“The price of fabrics has increased because raw materials have increased, so it has to increase. Nowadays, it is inevitable for customers to negotiate lower prices, and the gross profit margin is only about 5%.”
It can be seen from the feedback from enterprises that this round of fabric price increases is a helpless move due to cost pressure, and it is also a “war to defend” corporate profits. As we all know, this year’s textile market is experiencing “internal pressure and external pressure”, and it is not easy to increase prices. Most companies are relying on low prices to obtain orders, and the result is that profit margins are continuously compressed. Someone once said frankly, “There are orders, but the profits are not as good as before!”
Regarding operational pressure, textile bosses most often mentioned funding issues. Those doing spot goods said that the initial capital investment was too large, and stocking took up a lot of working capital; weaving companies lamented that the pressure for payment cannot be ignored, and the account period was forced to be extended by more than one month; those doing trade said that it is really difficult to screen customers , there are too many old people.
Many textile bosses are looking forward to the market outlook. They believe that with the arrival of the traditional peak season, it is inevitable that the market will improve. Of course, there are also those who hold a neutral wait-and-see attitude. They say that the trend in the later period is not yet clear, so they should take it step by step. This August, is it the transition period of the peak season or the “ultra-long standby” of the off-season? Time may give us the answer.
</p
