Since New Year’s Day, major polyester factories have continued to increase prices slightly, and the prices of various specifications of polyester filament have risen again, approaching the highs in 2022. In the new year, the price of polyester raw materials continues to rise, and the pressure on downstream weaving companies has increased!
But in fact, many weaving companies are still selling goods and selling them at prices 40% lower than at the beginning of the year. But it is really a helpless move. At the end of the year, when a large amount of cash is needed, it is difficult to recover customers’ receivables, so they have to sell goods to cash out.
It is a practice to stock up before the end of the year to prepare for production after the end of the year. Traders stock up on gray fabrics or finished fabrics at the end of each year. After mid-December last year, some traders seized the last wave of market conditions and were busy stocking up on gray fabrics and finished products. However, in recent years, due to the economic downturn and weak market conditions, the phenomenon of traders hoarding goods has significantly reduced. But this year seems to be different, with more companies stocking up. What are the reasons for trading companies to stock up on goods?
The price of gray cloth is low, suitable for stocking up.
First of all, the selling price at the end of the year is indeed very low, and the price is exciting. Maybe if you miss this wave, it will be difficult to have such a low price again. In addition, the more important reason is that the current raw material prices are already at a relatively high level and are showing a rising trend. Polyester factories have also issued warnings that prices will continue to rise after the Spring Festival. At the same time, gray fabric manufacturers have also stated that gray fabric prices will increase after the year. Therefore, the possibility of gray fabric prices rising after the year is very high. Then this is definitely the best time to stock up, and traders cannot miss it.
Stock up in advance to handle urgent orders after the new year
On the other hand, because the Spring Festival is early this year, factories also went on holiday early due to the impact of the epidemic, and some traders still have unfinished orders. After the New Year, due to the inconsistent return of workers, the resumption of work every year is slow. For some orders with short delivery times, the production time is tight, so traders must arrange some products before the dyeing factory goes on holiday. In addition, you may receive urgent orders before holidays and need to ship goods quickly. At this time, stocking up plays an important role.
As the domestic trade market is expected to improve and domestic production and life rhythms become more stable in 2023, demand in the domestic trade market for textiles and apparel will rise year-on-year, which may alleviate the impact of increased foreign trade resistance to a certain extent. The editor also believes that the upstream polyester raw material cost support is strong, and it is more likely to continue to increase after the year. While the cost side continues to rise, the price of gray fabrics will also rise accordingly. And the new year is the best time for manufacturers to raise prices. There is a high probability that the weaving market will have a good start after work resumes during the Spring Festival every year.
Gray fabric prices will rise after the year
The person in charge of a weaving manufacturer that produces elastic fabrics told the editor clearly: “There was a wave of destocking at the end of the year, and all the goods were sold below the market price. Most of the inventory has been cleared. Some specifications have stopped being sold because of the new year. The price will definitely increase in the future, so I have to keep some of it to sell after the year.”
It can be seen from the data monitoring of Silkdu.com that the current inventory of gray fabrics is at the lowest level in the same period in the past two years. Judging from the inventory of gray fabrics, this wave of shipments at the end of the year was good, which also indicates that under the policy of relaxing the epidemic, market confidence has recovered and the order-taking atmosphere has improved. The price of gray fabrics has indeed continued to fall this year, and corporate profits can almost be said to be a loss versus a profit. And driven by rising raw material prices, weaving companies are already ready to raise prices. It has almost become a certainty that gray fabrics will rise after the Spring Festival, and this year’s low prices may no longer exist by then.
According to usual practice, after the Spring Festival in previous years, the trading atmosphere in the market will gradually recover, and domestic demand and foreign trade orders will be further released. Although there are still some uncertainties in the textile market next year, what is certain is that the raw material market is now at a high level and it is difficult to fall. Driven by the combination of demand and cost, low-priced fabrics may become a thing of the past!
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