The time is approaching July. With the rainy weather, the textile market is also entering the traditional off-season.
Although it is said to be the off-season, according to what the editor has learned, there is not no demand in the market. Some autumn and winter clothing fabrics have begun to be shipped in advance, but there are also many hidden dangers.
If you want orders, there will be no profit; if you want profits, there will be no orders
First of all, the biggest problem in the market now is not the lack of orders, but the lack of profits. There is a lot of hot money in the market now, and traders are not short of money. As long as the quality of the cloth is decent and the price is low enough, there will be no shortage of buyers. However, once this is done, profits are basically not guaranteed, which means that it is a waste of work for the downstream, and it is even possible to lose money after selling the cloth.
In order to make a profit, it is very difficult to accept orders, unless the factory’s technology and quality control are indeed much better than other companies, allowing the downstream to sell at high premiums, but this is only the case for some in the industry. Leading companies can do it, but most textile companies just follow the general trend.
The market situation in the second half of the year is overdrawn in advance
In addition, we have also seen that many of the orders at this stage are for autumn and winter clothing, and many of them are from trading companies or fabric supermarkets stocking up in advance.
But firstly, they stock a lot in advance because the fabrics in the off-season are cheap, and they may not stock up once they feel the prices are too expensive; secondly, the quantity they stock is limited, and they overdraw in the second half of the year. Quotes.
The fact is that in the current situation where domestic and foreign trade lacks bright spots, the market does not have that big demand for textiles, but production capacity is constantly expanding, and overcapacity has become an established fact.
Textile companies “fancy production reduction”
Of course, overcapacity is not new. During the off-season in the past few years, in order to control inventory, textile companies adopted various methods to “cut production in fancy ways.”
One way is to find various holidays to give workers time off. Due to some policy, loan and other reasons, it is difficult for textile companies to stop production directly, but it is different during some holidays. If the state does not stipulate a holiday, here we will have a 3 day; if the state stipulates a 3 day, here we will have a week. Working from 9 to 5, with weekends off, highlighting a “human touch”.
The other is to make a fuss about the weather. The weather in summer is changeable, with super high temperatures for one moment and heavy rain for the next. If orders are good, of course we should be prepared to face the difficulties and ensure production, but when the market is bad, these are all reasons to take a holiday.
Of course, there are also some unexpected factors. For example, production must be stopped wherever there is pollution, and production must be stopped to provide electricity to residents. For textile companies that want to control inventory, it is good to have legitimate reasons to stop production for an extra day or two.
However, this year’s situation may be a little different from previous years.
First, Boss Bu has suffered enough from high inventory in the past few years. He will consciously control inventory in daily production and operations, and he also has psychological expectations for this year’s market. With expectation management, it will be difficult to appear Being caught off guard because the inventory is too high;
Second, the Yangtze River Delta used to be a gathering place for weaving production capacity. As long as companies here focused on reducing production, the effect of inventory control would be immediate. But now the peripheral textile production capacity has increased, and it has far exceeded the Yangtze River Delta in terms of quantity. Even if the weaving companies in the Yangtze River Delta reduce production, as long as the peripheral production capacity does not follow the reduction, the final impact on the overall inventory will be limited.
In general, inventory is still one of the things that textile companies need to be most concerned about in the off-season. “Fancy production cuts” may still occur in the next few months. As for profits, that is something that needs to be considered later. .
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