According to CCTV Financial Report, the current apparel foreign trade business is booming and orders have been scheduled until November.
This is good news for the entire textile industry, especially in the traditional off-season period. Such good news is undoubtedly It’s a shot in the arm. Has Boss Bu’s confidence returned?
-01-
Downstream gray fabric companies are in the off-season
Orders in the garment industry are booming, and downstream fabrics are closely related to it However, the company’s order-taking situation is not good. The downstream gray fabric fabric market has entered the annual off-season, and the overall market order receipts are slightly weak. The number of orders received by traders has dropped significantly, and many companies have said that they have finished holding large quantities of goods, and only small batches of orders are being replenished. Since the outbreak of the epidemic, foreign trade has been difficult to make major breakthroughs and its performance has been average. Nowadays, foreign traders still don’t have many orders on hand, and most of them are looking for samples and proofing. In terms of gray fabrics, except for nylon, four-way elastic and other fabrics, the sales remained good, and the other performance was average. In terms of dyeing factories, the number of gray fabrics entering warehouses has gradually decreased recently. Many medium and large-scale factories have dropped from 5.6 million meters per day to 3.4 million meters per day. The operating rate has also dropped accordingly, from 72% to 70%, and there is still a downward trend.
Whetheritisfabrics,grayfabricsorprintinganddyeing,itshowsthatthedownstreamtextilemarketisintheoff-season,butwhyisthesituationofgrayfabriccompaniessodifferent?Infact,thereisaveryobviouslagbetweenclothingandgrayfabrics.Afteraclothingcompanyreceivesanorder,itneedstoselectsuitablefabrics,makesamples,testcolors,andfinallyplaceanorderwiththefabricmanufacturerafterconfirmation.Thetimerequiredcanrangefrom1monthtomorethan2months.Therefore,thedownstreamgrayfabricmarkethasnotyetfeltthepopularityofthiswaveofclothingorders.Accordingtopreviousyears,ordersforthesecondhalfoftheyearwillbasicallystartattheendofAugust.Calculatingthetime,thelargenumberoforderscurrentlyreceivedbygarmentfactorieswillnotbetransmittedtothegrayfabricweavingindustryuntilmid-to-lateAugust.
Apersoninchargeofaforeigntradecompanysaid:”Theoverallorderreceptionsituationinthefirsthalfofthisyearisnotbad,withordersrangingfromtenstohundredsofthousandsofmeters.NowIonlyhaveafewThekilometerlistisoverforthetimebeing.ThesecondhalfoftheyearisexpectedtostartattheendofAugustandisexpectedtobebetterthanthefirsthalf.”
-02-
Market expectations for the second half of the year are optimistic
As early as early June, the market suddenly improved, and gray fabrics of some specifications began to sell well. A large part of the reason for this was the optimistic predictions of the textile industry about the market in the second half of the year. Although there are two traditional peak seasons in a year, the peak season in the first half of the year is shorter and less popular than the second half of the year. Therefore, the second half of the year is the most important sales season for textile people. Nowadays, garment factories have received many foreign trade orders. Since foreign trade orders take a long time, they have been placed. Domestic sales orders will also start in mid-to-late August. In the first half of this year, the total export volume of apparel reached US$71.5 billion, a year-on-year increase of more than 40%, and an increase of 9 percentage points from 2019. While the overseas epidemic continues, the foreign trade situation has still reversed. It is believed that clothing exports will continue to grow in the second half of the year. The OECD recently raised its global economic growth forecast, saying that the global economy is expected to return to pre-epidemic levels by the middle of this year.
-03-
Be wary of blind optimism and avoid risks
Although from the current clothing factory The single situation and data forecasts from professional institutions all reflect the improvement of the textile market in the second half of the year. However, if the downstream weaving gray fabric market has not received substantial orders, we cannot be blindly optimistic. Especially the current hot sales of gray fabrics such as four-way stretch, T400, and nylon fabrics can easily arouse the market’s mentality of following the trend. It is not advisable for manufacturers to modify their machines for mass production and for fabric dealers to stock up crazily. We need to be wary of such behavior.
According to the demand for gray fabrics in the peak season every year, the hot ones are the conventional varieties, and the inventory and production volume of conventional varieties are very large. Even in the peak season, when the demand is huge, the supply Still very relaxed. In terms of price, price wars are still raging in the market. For example, the price of spandex raw materials has soared recently, but the price of gray fabrics has still not followed suit. Even if the price of gray fabrics is likely to be raised uniformly during the peak season, based on the price increases in recent years, the range will not be too large, 0.1-0.2 yuan/meter. The editor believes that there is really no need to take greater risks and cause greater losses for the sake of 0.1-0.2 yuan/meter.
A weaving manufacturer that produces conventional varieties said: “The price war is still too much this year. It’s so great that there is no profit. It may be that there are too many machines in Henan, Anhui and other places. In addition, the raw materials are constantly changing, and the costs are also changing, but the price of gray fabrics cannot rise, and some of the gray fabrics sold are simply removed. If you don’t make any money on costs, you will lose money if you encounter customers lowering prices.”
In any case, the business of garment factories is booming, and orders are scheduled until November, which will still have an impact on gray fabric companies. The market conditions in the second half of the year may be traceable in August.
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