The Dragon Boat Festival holiday is coming to an end. Some textile factory owners were troubled by the epidemic in the early stage. Under the influence of rising costs, they even have a holiday for the Dragon Boat Festival! This is enough to show that the current downward pressure on the downstream end is huge, and the impact caused by various factors cannot be digested in a short time. Visiting the market, I found that many bosses are also suffering. What else can they do besides holding on until the dawn of time comes?
The startup is high and low, and the orders are always miserable.
Although logistics is currently improving and various regions are also recovering economically in an orderly manner, the first half of the year, both abroad and domestically, has dealt a real blow to the textile industry. The operating rate is also several percentage points lower than in previous years. Coupled with the fact that the off-season is approaching, if you want to restore the previous style overnight, you can only hope that demand will surge in the second half of the year…
Many bosses I visited could only smile bitterly and shake their heads regarding orders and availability. Boss Jiang, who specializes in autumn and winter men’s and women’s clothing fabrics, mentioned: “The factories we cooperate with have gradually reduced their operating rates since April and maintained them at around 60%. They are mainly sold to Europe, but there are really few orders!”
Manager Liu, who specializes in woven fabrics for men’s and women’s clothing, said: “The factories we cooperate with have begun to gradually reduce their operating rates, mainly selling to Shanghai, Fujian and India. However, orders are not good right now. May is the weakest, and March and April are slightly slower. better.”
However, there are also some other bosses who have factories or factories they cooperate with. The current startup rate is still around 70-80%, but compared with previous years, this is considered a low startup rate. Therefore, there is Mr. Chen who specializes in autumn and winter fabrics. Said: “The orders are similar to the previous period, but they are not good! There are hundreds of thousands of meters of gray fabric inventory. Because the operating rate has dropped, the inventory is also low.”
There are hot sales, but more for less profit
The market is now filled with raw materials rising one after another. Whether it is the unexpected continuous increase in oil prices or the fact that polyester yarn has been driven by this and has to rise accordingly. The prices of some varieties have soared by nearly 1,000 yuan in May. Yuan/ton, but we all know that this increase is only in cost! Even if there are hot sales downstream, they can keep up with the increase, but they are far from keeping up with this pace.
Mr. Shen, who specializes in polyester taffeta and Oxford cloth, said: “Oxford cloth and polyester taffeta are selling well, and the prices have also increased, but the overall profit has dropped by 30 to 40%.”
However, Mr. Hong, who specializes in imitation silk fabrics, said: “Imitation silk has been selling well recently, but the price cannot rise, and the profit is very thin. I can do it if I can break even.”
For companies that currently have nothing to sell, in order to survive and maintain capital, they have to start by reducing costs. Mr. Liu, who specializes in woven fabrics, said: “There is nothing to sell. We have fixed orders all year round and the prices are fixed. Profits are decreasing, so we reduce workers in the off-season to balance the decrease in profits.”
There’s so much trouble, can the price still go up?
The profits of hot-selling products are not high, and it is no longer easy to maintain capital. There are too many manufacturers making conventional products on the market. Unless new products are developed, involution and competition will become more serious. The rise in raw materials is only one aspect. Other problems also reflect the current difficulties in the textile market.
Mr. Jiang, who specializes in chemical fiber fabrics for men’s and women’s clothing, said: “The price of raw materials has increased, but the price of finished fabrics has dropped. 380 nylon spinning sells for 2.4 and 2.3, but there is no sales. The industrial transfer is serious, and the international situation has a great impact on foreign trade companies. The supply of gray fabrics currently exceeds demand, and there is little motivation for rising prices.”
Most of the bosses have also mentioned the issue of freight. Many of them bluntly said that the freight is too high. It is difficult to increase the price of gray fabrics, and they basically do not make much money. Mr. Liu, who specializes in woven fabrics, said: “Transportation costs have become higher, especially for many of our shipments to Shanghai. The one-time shipping cost has increased by at least 1,000 yuan. Because it is not easy to increase the cost of a few cents for repeat orders, the customer will fix it. Next. The increase may not be big because the off-season is about to begin.”
When some bosses face the next market situation, they mainly depend on the environment and the epidemic situation. Some are optimistic, saying that after all, the lockdown will be lifted and things will get better and better in the future. It is also said that it depends on market confidence. Without confidence, no one dares to place orders casually. There are also some who are not optimistic, thinking that the industry will become more and more involved, and that textile manufacturers need to go to the market more. Just relying on the phone is useless, but they can’t tell when and where there will be another epidemic, so they dare not Running around so you can’t develop new customers…
All in all, the more difficult it is, the faster the product will be updated. How to balance supply and demand?To maintain a foothold amidst the competition and fluctuating prices is something textile people need to consider.
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