The time has come to the end of July, which is the time when July and August alternate. The market has been said to be “slightly weak, eight active, and nine prosperous.” The market has also undergone some changes at this critical time point.
The biggest change is that we are one step closer to the peak season and finally out of July when the market is at its weakest. Many bosses have reported that the market has been much better recently.
Some companies responded: “Starting from this week, the market seems to have improved a bit. We have several customers calling to inquire about prices. Although we haven’t seen the actual orders yet, we see hope compared with the lack of movement in the previous two days.”
Gray cloth prices rise slightly
Recently, the phenomenon of polarization in the market has been very obvious. Some manufacturers have reduced prices and sold goods, while some manufacturers have slightly increased the price of gray fabrics. For example, the prices of 228 Taslan and 380/400 matt nylon increased by 0.2 yuan/meter.
Some bosses also said: “For the factories we cooperate with, the prices of gray fabrics have also increased slightly. Now it is just a slight increase and the impact is not very big.”
Another boss also said: “There shouldn’t be much price reduction now. It has already reached the lowest level. If it goes any lower, you will lose money. The raw materials have become a bit more expensive recently. Although it has not increased yet, we may fine-tune it after a while.” .”
But why did the price of gray fabrics rise slightly? According to market research, the bosses’ reactions can be divided into two points. On the one hand, it is due to the recent reduction in production and startup of factories, and on the other hand, it is driven by the recent increase in costs.
Cut production and reduce startup
For weaving enterprises, the weaving operation rate has not been very high since the beginning of this year. It has remained at about 70% from the beginning of the year to the present. At present, the operation rate of enterprises has been less than 70%.
A weaving company said: “The factory is currently reducing production by 20%, mainly because of insufficient orders and high operating costs. The factory has enough inventory to sell. We will wait until the market improves slightly before reopening.”
The owner of a trading company also responded: “The factories we cooperate with are now on holiday. They have changed from working 24-hour shifts to working 7-8 hours a day. It is estimated that only 40% of the factories are running.”
Under the influence of the off-season, it is foreseeable that the operating rate will decrease. In the case of overcapacity, even if the factory reduces production, its own inventory will be enough for factory sales, and production inventory will only increase its own pressure.
Now, due to the reduction in startups and the gradual flattening of factory production and sales, gray fabric prices can gradually test the upward trend. Regardless of whether it is successful this time, it is always a good start.
Rising costs
Another reason is more direct. The cost side is rising. The recent rise in crude oil prices has not diminished enthusiasm. As of this weekend’s data, international crude oil futures prices have climbed.
U.S. WTI crude oil has exceeded US$80, and Brent crude oil price has exceeded US$84 per barrel for the first time since April. The two major indicators have increased by approximately 15.17% and 17.98% respectively from this year’s lows.
As crude oil rises, the price of polyester yarn also rises. This week, polyester factories raised prices by an average of 50 yuan/ton. For weaving companies, any increase in costs during the off-season will affect their own profits.
In the past two years, weaving companies have been playing the role of a sandwich. They want to increase prices but cannot do so, but the upstream does not care about the life and death of the downstream. It doesn’t matter when there are orders in normal times. But now that there are fewer orders in the off-season, the impact is relatively large. Who can withstand the high price of raw material and textile inventory?
To sum up, although the price of gray fabrics has increased slightly at present, the market has not been boosted. It is just the self-help of weaving enterprises. As the peak season approaches, orders are gradually becoming more active. If this wave of price increases can continue, perhaps the market atmosphere will Be boosted.
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