Entering the traditional off-season of July, the textile market has become much deserted, and the shipment of gray fabrics has obviously slowed down. Looking at the growing inventory of gray fabrics, the cloth boss felt a little panicked and inevitably began to sell goods to varying degrees.
An owner of a spot supermarket revealed that 500,000 meters of 300T pongee black were released a few days ago for 2.4 yuan/meter. According to our quality, this price is on the low side.
The boss also revealed that there have been shipments recently, both large and small. Although it is currently the traditional off-season, some orders are still being placed. The most important reason why customers dare to take action is that they believe that the market will improve in the second half of the year, and the current price is low and the price will rise in the second half of the year. And 300T pongee is often used in autumn and winter clothing and linings, and black is the color used in most clothes, so you can prepare some appropriately.
Although the price of various fabrics increased by 10%-20% compared to last year due to the increase in raw material prices at the beginning of this year, the increase in raw materials was basically ignored when the goods were sold. The prices of many sold fabrics were the same as last year. Taking 300T pongee as an example, the selling price of gray fabric last year was basically around 1.63 yuan/meter, but currently it is only 1.4 yuan/meter on the market. At this price, it is bound to be a loss, but if the fabric can be converted into funds in time, then the lower price is reasonable. However, in contrast to the sell-off in the market, many textile companies are rushing to purchase fabrics.
Selling goods also failed to solve the industry’s difficulties
Over time, the fabric sales on the market will inevitably be some inventory that no one wants for a long time. It is obviously impossible for these discarded fabrics to attract some traders who value fabric quality. They can only flow to some fabric dealers or low-price and low-quality clothing merchants, or they can be dyed in various colors and entered into spot supermarkets. But how big is the market for these buyers, and can they continue to absorb gray cloth stocks? Obviously, relying on these buyers, the inventory of gray cloth cannot be digested at all, and even if the goods are sold at a low price, they may not be able to sell them.
Strictly speaking, selling goods is not a type of “price war”, but it brings more harm than a price war. If it is a regular “price war”, the profit of cloth will be sharply compressed or even slightly lost. Although it will affect the price, generally speaking, there is still a trace of how much one meter of cloth sells, and it will always fluctuate up and down the cost line. . But selling goods is not like this. It directly cuts the price of cloth in half. For example, 300T pongee is 2.4 yuan/meter, and the price of gray fabric plus dyeing fee is 2.6 yuan/meter. Then the cost will not be recovered this time. In addition, in order to withdraw funds, companies will throw tens or even millions of meters at a time. Such a large amount will naturally greatly disrupt market prices.
If corporate profits are not restored, will the peak season still exist?
The increase in selling in the market will also greatly suppress the market conditions. During the visit, a weaving boss who specializes in imitation silk said that when customers come to quote, they will even quote you a price lower than the cost price, which makes them very helpless.
The dumping of goods disrupted the market price, making it difficult for some weaving companies operating normally to receive orders at a normal price. But now that so many companies in the market continue to sell goods due to various reasons, it is difficult for the market price to return to normal. Even if the demand in the market rises, companies still have no profit, and in the end, “everyone loses.”
The phenomenon of selling and hoarding goods in the market now has its own rationality. After all, there is still uncertainty in the market in the second half of the year. In addition, even if they know that the market will improve in the second half of the year, textile companies must have funds to survive the current off-season, so selling goods is inevitable. Textile demand will not disappear out of thin air, but will only shift and be delayed. Overseas demand was not good in the first half of the year, and a breakthrough point may be expected in the second half of the year.
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