It is said that the Eighth Commercial District of Shengze is the weathervane of the weaving market. For this reason, the editor specially went deep into the Eighth Commercial District. The first thing I saw were piles of gray fabrics piled outside the store, as well as forklift workers and loaders waiting to find work. This scene reflects the desertedness of the current business district.
In the past, when I passed by the Eighth Commercial District in the morning, I saw many trucks loading goods early in the morning, but recently I have hardly seen such a scene. Entering November, the market situation took a turn for the worse. The news that the market had improved in October had not completely dissipated, but suddenly there was news that there was a serious shortage of orders and production was unsustainable. This unpredictable market situation is really confusing!
01
The weaving market is cooling rapidly
Driven by the “Double Eleven”, the market in October has been greatly improved. Who knew that it had already taken a turn for the worse in just half a month. The rapid recurrence between peak season and off-season is also unique to the textile market in recent years. Although the market situation in October cannot be said to be “Silver Ten” at all, it also performed better in the second half of the year. However, judging from the recent market performance, it is very likely that this wave of market conditions has been overdrawn in advance, and it is already a luxury to hope that we can talk about the peak season in the future.
This year’s “Double Eleven” market in the textile market has been postponed. This spring, the entire sales season was missed due to the epidemic, and a large number of clothing company warehouses were filled with spring clothing inventory. Some of them change some spring clothes into autumn clothes for sale, or simply resell them as they are, which leads to a significant reduction in demand for autumn clothes. In addition, the temperature plummeted in October, and the weather also led to people’s desire to buy winter clothes. Therefore, the pre-sales of down jackets increased during the “Double Eleven”, which led to an increase in orders for winter fabrics in October.
Facing the fact that there are fewer and fewer executable orders in hand, and there is no sign of orders for next year, most textile workers are still “uneasy”! “Currently, we don’t have many orders left. After shipping this batch of goods, I will start to collect the payment. However, this year’s payment is expected to be more difficult than in previous years because our customers have not yet received payment from the terminal clothing company, so They will also say they have no money!” This year’s textile workers are covered by the word “sorrow”.
02
The price of gray fabrics has increased, and factory production enthusiasm has declined.
Although it has certain reference significance to judge the entire Shengze market from the market conditions in the Eighth Commercial District, it is still one-sided. In fact, market conditions have always been divided, so some people say the market conditions are good, while others say they are bad. Inventories are not unified and differentiated significantly. Some companies only have 100,000 meters of gray fabric inventory, or even none; some have production in 50 or even 60 days. Such differences are mainly due to different sources of orders. Enterprises with low inventory of gray fabrics are mostly due to the large number of foreign trade orders currently being made, which consume most of the inventory; enterprises that also rely entirely on domestic sales orders have low demand at this time, and insufficient quantity of gray fabrics has caused greater inventory pressure.
The inventory of gray fabrics varies significantly among enterprises, and the operating rates also vary greatly. Among the surveyed companies, some weaving mills are at around 70%, but many are running at 100% production and have no plans to reduce production in the short term. Some companies are only half-open, and some are even planning annual holidays.
In the final analysis, it is still a matter of cost. Although we have always believed that suspending production, reducing production, and taking workers off will definitely reduce costs and reduce expenditures, in fact these alone are not enough. Although these expenses cannot be avoided when the factory is started, gray fabrics are also produced at the same time, and most chemical fiber gray fabrics are easy to store and are suitable for long-term stacking. Blindly suspending production will not only avoid expenses such as rent, machine depreciation, social security, employee subsidies, etc., but will also face the embarrassing situation of not producing a single meter of fabric. Therefore, it is understandable that the weaving mill will not stop production and operate at a high rate.
The busyness of the Eighth Commercial District tells us that the current market is indeed showing a sluggish trend. But it is also expected. In previous years, the market began to gradually decline in November. There may be a small rebound in the middle of the order, but it is difficult to drive an improvement in the market.
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