Since December, epidemic control has been relaxed in many regions across the country, temperatures have also dropped rapidly, and replenishment of some winter orders has increased, driven by a bottom-up recovery in demand. How do you view the changes that this recovery will bring to the industry? How have manufacturers’ operating loads changed? We will answer these questions through front-line research.
The opening rate of Jiangsu and Zhejiang increases
First of all, judging from the current market recovery, many factories have indeed increased their machine load, and some factories are operating at full capacity. According to the data monitoring and analysis of Silk City Network, the current comprehensive operation of looms in Jiangsu and Zhejiang has increased to 50%: 50% to 60% of Wujiang water spraying, about 70% of Changxing water spraying, 50% to 60% of North Jiangsu water spraying; 60% to 70% of Haining warp knitting , Changshu warp knitting is about 60%; Shaoxing circular knitting machine is slightly above 40%, and Changshu circular knitting machine is about 40%.
NO.1
Mr. Shen, who specializes in various types of chemical fiber fabrics, told the editor that the factory’s current operation rate is 100%, and last month’s operation rate was 100%. He also said that there will be no adjustments in the future and will wait until the holiday on January 16th.
NO.2
“The start-up rate is 95%, which was 95% last month. It is planned to be until January 10, 2023, depending on the situation of workers returning home.” said Mr. Gu, who produces luggage fabrics.
NO.3
Mr. Shi, who produces pongee and nylon fabrics, also said that the machines are currently running at full capacity, with 80% running last month. There has been an increase in orders recently, so we are fully open. The holiday is currently expected to be around January 10th.
Gray cloth inventory fell significantly
With the normal liberalization, the recovery of national logistics, coupled with the cold weather and the increase in upstream raw materials, the demand for replenishment of winter cold-proof fabrics in domestic trade has increased. The winter demand for terminal textiles and clothing has been boosted, and the transaction volume has increased compared with last week. . At the same time, it has also brought about a decrease in the market’s gray fabric inventory. Weaving manufacturers’ gray fabric inventory has been significantly destocked due to early low-price shipments. According to data monitoring from Silkdu.com, the current inventory of gray fabrics in Shengze area is 37.2 days, a decrease of 0.8 days from last week.
There are also some companies in the market that have taken advantage of this wave of market conditions to sell stocks. When selling goods, factories are also on holiday, so there is currently very little inventory left in the factory. Manager Tang, who produces elastic fabrics, said that his company took advantage of the market trend at the end of the year to successfully destock, reducing the inventory from more than 2 million meters to more than 100,000 meters, and the factory has been on annual holiday.
However, most factories are still producing and inventories have not been cleared. Mr. Shi, who produces pongee and nylon fabrics, said: “We are mainly based on orders and seldom carry out inventory, which is almost hundreds of thousands of meters. Recently, there have been many orders and less inventory.”
Mr. Gu, who produces luggage fabrics, also said that his company uses a spot + order sales model and always maintains 8 million meters of inventory. However, orders have increased recently and have been reduced by 10%.
Nylon, four-way elastic and other gray fabrics are hot-selling
While the market is picking up, we pay more attention to details, such as which fabrics have increased sales? Which types of clothing orders are increasing? And why is it increasing? Regarding these questions, we also obtained answers through surveys. Nylon, four-way elastic, Oxford cloth and other gray fabrics are popular. These are mainly used in the production of winter clothing and outdoor, luggage and other industries.
Mr. Shen, who specializes in various types of chemical fiber fabrics, said: “At present, our company’s nylon 66 products are relatively hot-selling, and they are mainly used in pants.”
Mr. Shi, who produces pongee and nylon, said: “20D nylon has been selling well recently, but there is still no profit. It is mainly used in the production of down jackets, the last wave before the Chinese New Year.”
Manager Tang, who produces elastic fabrics, said that the inventory of 100D four-way stretch fabrics has been cleared recently and has been very popular recently, mainly because this type of product is very common and can be used by garment factories all year round.
Raw materials rise, gray fabric prices are affected
As market liquidity improves, downstream manufacturers are more enthusiastic about stocking raw materials. As the year is approaching, most manufacturers are more willing to stock up. The number of days to replenish raw materials during the week has increased compared with last week, and there is still demand for replenishment from next week to the end of the month. Because of this, the prices of raw materials, mainly polyester, have been rising recently. At the same time, it will also have a certain impact on the downstream gray fabric market. Some companies have also raised prices accordingly, but some companies have no choice but to fix prices and increase cost pressure.
Manager Tang, who produces elastic fabrics, said that after the increase in polyester yarn, the discount on our gray fabrics was also cancelled, which is equivalent to an increase of about 0.2-0.3 yuan/meter. And prices are expected to continue to rise after the year.
However, Mr. Shen, who specializes in various types of chemical fiber fabrics, told the editor that the increase in raw materials has not had a great impact on us. The price was locked when we placed the order, which mainly caused a slight increase in costs.
Market expectations are optimistic
Currently, orders are showing a pulse increase. Although domestic and foreign trade orders are improving in the short term, the weaving start-up rate in Jiangsu and Zhejiang has increased slightly. Gray fabric inventories have been cleared significantly during the week, and downstream users have increased their enthusiasm for stocking raw materials. However, as the year is approaching, most users are in the final wave of delivery. Looking at next week, the startup rate may be temporarily stable, and then enter a volatile downward trend. After New Year’s Day, large areas will be parked for the holiday.
Mr. Shen, who specializes in various types of chemical fiber fabrics, predicts: “I am optimistic about the market in the first half of next year. The market will improve next year, which is definitely due to the relaxation of control, foreign trade orders can start, and the cycle of domestic and domestic trade in the past two years has also improved. The foundation has been laid, and the dual cycle of domestic and foreign trade will lead the market to a new stage.”
“With the gradual optimization and adjustment of epidemic prevention policies, China’s economy will definitely usher in great development next year, which is both an opportunity and a challenge. Forging iron requires one’s own hard work, good products, optimized management, and adapting to the domestic cycle as the main body and the domestic and international dual cycles. A new development pattern.” said Mr. Gu, who produces luggage fabrics.
However, overall, due to the approaching New Year’s Eve and the rush of time, the sustainability of this wave of market conditions is limited. After the delivery is completed, most weaving manufacturers will gradually stop for holidays from early to mid-January. But this time the market may be able to lay the foundation for the start of next year.
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