As the first load of gall cloth and milk silk woven in Xinjiang was transported to Jiangsu and Zhejiang, the term “Xinjiang blank” came into being.
It is understood that the raw materials for this batch of gray fabrics are produced by the polyester factory next door, and the production costs are also extremely low (for example: the electricity bill is as low as 0.28 yuan), and the freight out of Xinjiang is fully subsidized… Follow-up, After the machine debugging is completed and production operations are on track, the menacing gray fabrics will directly impact the price bottom line of related gray fabrics.
“Jiangbi” is here!
Raw materials have rebounded significantly, while fabrics have declined steadily.
Since July, with the strong boost from the cost side, the domestic polyester filament market has rebounded slightly. As of July 21, the average prices of mainstream polyester products in Jiangsu and Zhejiang are as follows: polyester FDY150D is quoted at 8,250 yuan/ton, an increase of 270 yuan/ton from the beginning of the month; polyester POY150D is quoted at 7,600 yuan/ton, an increase of 250 yuan/ton from the beginning of the month; polyester DTY150D is quoted at 9,150 yuan/ton, an increase of 300 yuan/ton from the beginning of the month.
Multiple price reduction promotions in the early stage caused a surge in production and sales. Some specifications of polyester filament were in tight supply. Downstream concerns increased, which in turn led to an increase in the willingness of the weaving end to restock positions, and polyester companies were able to effectively destock. Subsequently, as costs continued to rise, the cash flow of most specifications of polyester filament yarns was significantly compressed, and polyester companies were reluctant to sell at low prices, causing the price of polyester filament yarns to gradually rebound in July.
But I don’t know when, but the rise in raw materials failed to drive the rise in fabrics. The survey results show that since the beginning of this year, the fabric market prices have been generally stable, and the only few small-scale price increases only appeared after the products were sold out.
A weaving company said that because the current order maintenance is not optimistic enough, the pressure brought by this round of rising costs can only be absorbed by itself. In addition, when negotiating with customers, price reductions often occur, and the price reduction range for individual products is close to 0.8 yuan/meter.
In fact, this is not the first time that the raw material side has acted out of common sense. A textile boss lamented: “When the consumption off-season is approaching, stable raw material prices are beneficial to the company.”
Orders have shrunk, and profits are only enough to support the factory.
I still remember that the editor interviewed an “old master” of textiles earlier. At that time, he revealed that after more than 20 years in the industry, he just wanted to spend 2023 safely.
Since this year, there are many textile bosses who have this idea. After inquiries, the editor found that there are two main reasons for this phenomenon.
On the one hand, overcapacity is like the Sword of Damocles hanging overhead. It not only brings an unbalanced supply and demand relationship, but also drives the market environment into involution. In order to compete for the same piece of cake, “price war” has become a common method used by textile companies. The already slim profit margins are constantly being squeezed, and not losing money has gradually become their last “stubbornness”.
On the other hand, the textile industry, which “depends on foreign trade for 70%”, is unreliable. There are various signs that since this year, orders from textile companies relying on the US and European markets have significantly decreased. In the first half of the year, orders from a certain foreign trade company in the European market dropped by about 50%, with orders mainly coming from the United Kingdom, France, Italy and other places.
Data show that in the first five months of this year, the United States’ imports of textiles and clothing from the world decreased by 22.6% year-on-year; Eurostat data shows that from January to April this year, the amount of textiles and clothing imported by the EU from the world decreased by 12.1% year-on-year.
As the saying goes, “In the peak season, we focus on performance, but in the off-season, we support workers.” In order to cope with the possible peak season, some weaving companies that are short of orders will choose to produce part of their inventory in order to feed their factories, and will also take orders that make little or no money to maintain normal operations.
Whether it is abnormal fluctuations in raw materials or a surprise attack on low-priced gray fabrics, weaving companies may face more and more problems in the future, and even leave a “feather of chickens in one place”. Therefore, how to “survive” this off-season has become particularly important.
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