By mid-August, there were gradually more scattered orders and samples on the market, and the market seemed to be showing signs of recovery. Textile workers have been operating under pressure since the first half of the year, with high inventories on one shoulder and high inventories on the other. One shoulder bears the responsibility of collecting funds. Now that we are getting closer and closer to Jinjiu, can the burden on the shoulders of the textile people be relieved?
And as the epidemic continues to rebound, various impacts have not dissipated, posing certain obstacles to the recovery of the global economy in the second half of the year. This will become an important negative factor affecting the future of the textile market. The “Golden Nine and Silver Ten” have entered the countdown. Will it really come as scheduled?
The editor’s point of view is that the gold, nine and silver will come soon! However, the duration is not enough to drag the disrupted textile market out of the quagmire!
Getting ready for the shopping festival
First, let’s talk about why the Golden Nine and Silver Eleven will definitely come! First of all, although the spring fabric sales season of gold, silver and silver in the first half of the year was missed due to the impact of the epidemic, this part of the fabric may be used by terminal clothing companies to make autumn clothing, but the two most important nodes in the second half of the year are Double Eleven and the Christmas season. The two time points are basically dominated by winter down jacket fabrics.
The market is now at a very sensitive time point – mid-August, and some details around it revealed that the market has indeed picked up. According to the order-taking experience in previous years, orders for the second half of the year will be launched at the end of August, and September and October are the stages of concentrated order placement. Although it is only mid-August, we have already heard that many autumn and winter fabrics have begun to be sampled, and a small number of Christmas orders and Double Eleven orders have been placed, so there is still something to look forward to in the market!
Since the peak season is coming, why can’t the textile market get out of the quagmire?
One shoulder is high inventory
The word “inventory” has become an unavoidable word this year. Many weaving companies have headaches because of these two words. Many companies have even sold goods at a loss. According to China Silk Capital Network monitoring According to the data, the current inventory of weaving manufacturers is about 36.8 days.
In such a situation of high inventory, the cloth whose price is lower will sell well. Even if you lose money, you still have to recover blood! Therefore, market prices have been relatively chaotic recently, with high and low levels. But the overall price has been pulled down and the price advantage has been lost. Finally, due to the superposition of the traditional off-season and high temperature effects, some manufacturers have begun holiday mode. Enterprises are happy to have a holiday because they no longer want to sell fabrics at low prices. They would rather reduce production in the short term and not consider shipping at low prices.
On the other shoulder is money
The scary thing is not the high inventory. After all, you can see from the picture above that the inventory has never been higher than in 2020. What is really worrying is the continued high inventory. It can be seen that the inventory of gray fabrics in 2022 this year has no bottom and has been at a low level. In a stable state, this means that the cloth cannot be sold. Just because the cloth cannot be sold, textile companies also face a major pain: payment repayments. Funds are not withdrawn, and they cannot pay wages or buy raw materials. In serious cases, the company will be paralyzed. Therefore, the current textile factories must control the suppression of cash flow and cost expenditure in order to survive.
The payment cycle of traders is generally longer than that of weavers. Under the influence of the epidemic, the payment cycle of traders this year is even longer than in previous years. Originally, the repayment time in the domestic trade market ranged from 1 to 3 months, but this year the repayment cycle has been extended by as little as one month, or as much as several months. In addition, in the foreign trade market, which originally had a relatively short payment cycle, due to the decline in global consumption levels, the payment time has been extended. Most of the time, payment is made after the clothes are made by the garment factory.
To sum up, this year’s “Golden Nine and Silver Ten” will usher in a wave of market conditions. Judging from the current low start-up of the industry, a lot of inventory on the market can be digested. However, because the peak season in the second half of the year is too short, this year’s off-season is too long. Therefore, it is expected that the warehouse may not be destocked in the third quarter as last year, but the phenomenon of selling goods at low prices may still be significantly reduced.
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