August is already here, which indicates that it is one step closer to the traditional peak season of “Golden Nine and Silver Ten”. August has also become a “critical moment” for the market. Only by safely surviving the off-season can we welcome the peak season. Otherwise, long-term high-load operations will become overwhelming. The “last straw” for some manufacturers!
1. The appearance of all living beings in Bu City: Some people drink soup, and some people eat meat!
It is said that this year’s textile market is the worst ever. There are no less than dozens of textile companies that have gone bankrupt in the past six months. But there are still companies that are continuing to put into production and expand. Recently, the US “Chemical and Engineering News” (C&EN) announced the list of the top 50 global chemical companies in 2022. Nine Chinese chemical companies have entered the top 50 in the world, with Hengli Petrochemical ranked 12th, Rongsheng Petrochemical ranked 27th, and Tongkun The group ranked 48th, Hengyi Petrochemical ranked 50th, and the chemical fiber leader accounted for nearly half.
Looking at the entire textile industry, some people drink soup and some eat meat. To determine whether a company is doing well or not, the key depends on what products they do and which market they serve!
In the past two years, under the influence of the global epidemic, the foreign trade market was severely impacted, and many orders were cancelled, resulting in a large number of foreign trade companies being forced to switch to domestic sales. However, at the beginning of this year, the domestic epidemic spread, and the domestic sales market was also affected. Domestic sales orders dropped significantly, and the foreign trade market began to recover. Since June, foreign trade orders have been placed one after another. Although it is still the off-season, the foreign trade market is extremely hot.
Mr. Hu, who handles domestic sales orders, said that recent orders have not improved and there are very few orders left. They can be completed this week, and there will be a window of opportunity next. Of course, many textile bosses said that foreign trade orders have been booming recently, and the orders on hand can probably be completed by the end of September. Mr. Wang, who has been receiving foreign trade orders one after another since June, said that the order volume has increased recently. “I have been making orders for pongee and Oxford fabrics recently, and they are tens of thousands of meters each time,” he said.
2. The boss of Bu’s company changed his mind when talking about “price”. Can the inventory be liquidated?
The most striking feature of this year’s market is low profits. It is true that the saying that products determine sales is true in any era. Conventional low-end fabrics began to be “rolled in” a few years ago, and a number of companies have been eliminated. However, this year, under the impact of the epidemic, companies will be screened again. Textile bosses who produce marketable products are very happy to take orders, while some companies that produce conventional products are “worried”. Judging from the sample companies monitored by China Silk City Network, market inventory has increased slightly recently, hitting a new high during the year.
According to the tradition of previous years, many secondary traders will choose to stock up on goods during the off-season, that is, when the market is weak, they buy gray fabrics at low prices and store them at home, and then sell them at high prices when the market arrives to earn the price difference. But this year’s operation is a bit abnormal.
It is understood that since this year, most secondary traders have low intention to stock up on goods. It is understood that the business of spot supermarkets has been bleak recently, and in the words of textile people, they have begun to “eat dirt”. Spot supermarkets mainly target the domestic market and so-called market orders. However, this year’s market orders have been greatly reduced due to the impact of the epidemic. And it is still in the off-season, and market orders are almost at a standstill.
“In the past, some old customers would say hello and ask us to make some products and put them at home and eat them later, but this year they were silent. These customers themselves are also tight on funds and the market is unstable, so they don’t have strong hoarding intentions. We are willing to sell goods,” said Mr. Wang, a textile boss in Shengze area.
“The most important thing is that we don’t have enough funds on hand. If we have enough liquidity, we can still make money in troubled times.” A textile trading boss who has been in the market for more than ten years said, “It is better to be safe this year. Raw materials The price fluctuates too much, so I would rather make a small profit than lose high-priced cloth. With so much inventory, I don’t have to worry about not being able to buy it.”
For Mr. Bu, he can comfort himself after stocking up for a month: Wait a minute, it will be cleared out after a while, but it will be different after stocking up for two months. Every day, he sees a huge amount of money lying around. What a painful experience it was in the warehouse. In order to ship goods, most manufacturers will choose to receive orders at low prices, remove inventory, and return funds. But even so, it is still difficult to realize the inventory.
3 gold, nine silver and ten? Can the market usher in this critical moment?
The COVID-19 epidemic has broken out in many places this year, shutting down the economy in many parts of the country and causing depression in all walks of life. However, wages and rents have to be paid continuously, resulting in the cash flow of small and medium-sized enterprises drying up. In recent years, my country’s environmental protection requirements have become higher and higher, and the textile industry has been greatly affected as a high-pollution and energy-consuming industry. This impact has caused factories to be unable to produce normally, costs are increasing, and some companies have even been shut down directly. Homogeneous competition, weakening domestic demand, blocked exports, broken capital chains, financing difficulties and other reasons have given ChinaThe survival of enterprises is even worse.
As a result, textile manufacturers are facing increasingly fierce competition, and various types of negative information frequently appear in the market: shutdowns, sales… Some factories with limited production capacity and financial strength have an even more difficult time in this cruel competition, that is, More textile people are looking forward to “timely rain” in placing orders in September this year. September and October have become the “critical moments” for the market!
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