Off season! There’s no end to the off-season! June is the 618 shopping season. For example, last year’s 618 pre-sales exploded and the order volume increased. Even if the order volume is only during one shopping season, it has indeed boosted market confidence. However, this year, the 618 shopping season It has been nearly two weeks since it started, and it seems that it has not injected any new vitality into the market.
Not long ago, when the editor was doing research, a boss complained: “The current order volume this year is 1/3 less than last year. Every place has been affected by the epidemic, and clothing companies are very cautious in placing orders.” And during the research, There are not a few bosses in this situation.
But the occurrence of this situation may have been foreshadowed, and it can even be said that the previous hidden dangers have now exploded.
Overcapacity
As we all know, the current gray fabric market production capacity is in a state of serious overflow. Through the data monitoring of Silkdu.com, we can get a gray fabric inventory chart from 2017 to the present. From the picture, it can be clearly seen that the weaving inventory has increased from 2018 to 2018. It began to rise in a straight line, which shows that the major turning point of capacity overflow was the wave of capacity expansion in 2018.
From this point on, the textile industry entered an era of involution. Regular types of fabrics on the market were directly priced to death. A pongee owner said: “Profits have dropped by 30%-40% compared to before. , it’s pretty good to be able to maintain capital now.”
profit loss
As this textile boss said, profit losses are a common phenomenon in the textile industry. Upstream polyester factories are also suffering from cost squeezes, and cash flow losses are expanding every week. However, in the final analysis, polyester factories are still upstream. As long as By raising the price, cost pressure can be transferred to the downstream. Downstream weaving companies have taken on this “big pot”. According to the monitoring of silkdu.com, fabric profits have dropped again compared with last week.
Moreover, weaving enterprises are in a very embarrassing situation, as if a “sandwich” of patties is sandwiched between upstream polyester manufacturers and downstream traders. The upstream increases prices while the downstream lowers prices. It is very difficult to increase prices. And because it is already in a state of overcapacity, the price of gray fabrics is easy to fall but difficult to rise.
Rising raw material prices did not boost the market
Judging from the past, the price increase of raw materials should be able to boost the market atmosphere to a certain extent. For example, at the end of last year, after the “Silver Ten”, the market entered a deserted atmosphere, but in December, the price of raw materials suddenly rose. , at the same time, many companies received orders, which brought some vitality to the market. But now, even though polyester yarn has risen for three consecutive days at the beginning of the month, and even today some manufacturers are making up for the increase, there is still no sign of it. Market vitality emerges. It can be seen from the weaving start-up rate that the current weaving start-up rate in Jiangsu and Zhejiang is around 66%. Since June has entered the off-season, it is normal from a year-on-year perspective. However, this low start-up rate has been maintained for three months, almost from It has been at a low level since the start of construction. One boss joked: “If we want to protect capital in this market, either the upstream will reduce production or we will take a holiday.”
Taken together, although the epidemic control has basically recovered, it is still difficult to increase the operating rate of weaving and dyeing factories. Considering that the clothing industry is an option in people’s livelihood consumption, the demand for clothing may not be as high as the epidemic background. It is not that big, and the shopping festival cannot drive demand for domestic and foreign trade. Therefore, it will still take time for the market to recover, but the overall direction is showing a gradual recovery.
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