July is the traditional off-season, and orders from companies will continue to decline, leaving the gray fabric trading market empty.
Poor order connection
According to the survey, the current number of orders received by textile enterprises has indeed declined compared with last month, mainly in a state of continuous small orders and occasional large orders. Affected by the off-season, the inventory of gray fabrics in weaving factories is still rising. According to data from Silkdu.com, the inventory of gray fabrics in weaving enterprises in Shengze is currently about 36 days, which is one day higher than that in early June.
Manager Zhang, who specializes in woven fabrics, revealed: “Currently there are very few orders. I only have a few small orders to follow up, which only lasts for ten days.”
Mr. Shen, who specializes in workwear fabrics, said: “The orders on hand will be completed this month. Now they are all in stock, and the delivery is not very good.”
“I didn’t receive any new orders in July. The orders I have are from June. They will be almost finished next week and the orders cannot be connected.” Mr. Wang, who mainly deals in Oxford fabrics and pongee textiles, also faces a shortage of orders. Case.
High weaving load operation
However, judging from the operating rates of weaving enterprises, the production enthusiasm of the enterprises is acceptable and has not declined significantly due to the off-season. According to data from Silkdu.com, the current operating rate of weaving enterprises in Shengze is 70.5%, a month-on-month decrease of 4.5% from the beginning of June and a year-on-year increase of 4.5%. From the comparison of the above two sets of operating rates, it can be seen that the current weaving load is relatively high compared to recent years. Even the operating rates of some companies are still at full capacity, and there are still no plans to decline in July.
Mr. Niu, who mainly sells Taslan and Oxford cloth, said: “The factory is currently running at 100%, the same as in June.”
“The factory’s operating rate is very high, basically fluctuating between 90-100%, and will not drop too much.” Mr. Shen, who specializes in workwear fabrics, also said.
The main reason supporting the high load of factories is that cloth bosses have high expectations for the traditional peak season in the second half of the year. Even though the delivery speed of gray cloth has slowed down and some factories have entered a state of inventory, in order to prepare for the second half of the year, there is no obvious willingness to reduce operations. In the traditional off-season, the price of gray fabrics is difficult to maintain, and has loosened as the market has weakened.
Factories are less willing to reduce production in the later period
The off-season of each year is also the hottest period of the year. In many cases, factories not only reduce production load due to a drop in the number of orders received, but also consider taking turns and holidays for workers to escape the summer heat. July has just entered, and although the hot weather has already been felt, the temperature has not continued to reach high temperatures. Therefore, most manufacturers are currently producing normally. As for the later period, according to the practice of previous years, the load will definitely be reduced accordingly.
Mr. Shen, who specializes in workwear fabrics, told the editor: “With fewer orders, the factory will definitely reduce production and is expected to reduce the load to 80%. There will be no holidays. If the holidays are directly given, the workers will not be paid, and they will not agree.”
“If there are fewer and fewer orders in the future, the production capacity will be reduced, but at most it will be reduced by half. We should also consider preparing some supplies for the peak season in the second half of the year.” Mr. Wang, who mainly deals in Oxford cloth and pongee, also said that he would reduce production.
However, Mr. Zhou, who produces four-sided bombs, said that he will not reduce production because he has many orders on hand and can maintain it until the end of August. But if the temperature is too high later, we will consider taking a few days of high temperature vacation.
It can be seen from the conversation of the cloth boss that the weaving load almost depends on the number of orders and market trends. Factory holidays are also more cautious than last year. Last year, due to the impact of the epidemic, there were more factory holidays, but this year it is obvious that there are fewer holidays.
Although July and August are the off-season every year, it is inevitable, but it will have some impact on enterprises. There are fewer orders and rising inventories, and the pressure on companies has also increased. The circulation speed of gray cloth has slowed down, and the return of funds has been slow. However, companies still have to pay employees’ wages, purchase raw materials, water and electricity bills, rent, loan repayment and other expenses every month, and the financial pressure is obvious.
Postscript
With more inventory and less money in Mr. Bu’s pocket, he would naturally think of selling goods. The goods are sold at a lower price than the market price. If the quantity is large, it will affect the overall market price and lead to a collective decline in gray cloth prices. But if you think about it from another perspective, it is reasonable for gray fabric prices to fall during the off-season.
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