In August, there was a different sound in the market: with the sharp rise in crude oil, PTA and ethylene glycol rose steadily, and polyester filament continued to rise. On the 5th, we ushered in a long-awaited general rise. Downstream dyeing factories also sent out signs of recovery, and the operating rate rebounded, rising from 55% to 65%. Is this the market going to pick up?
The domestic trade market has begun to recover, and T8 fabrics have become the most popular autumn and winter fabrics
After a thorough understanding, the current work of dyeing factories in the market is more than before, but the transactions are relatively mixed and have not improved on a large scale. This reflects the On the fabric side, orders have not picked up much.
According to reports from many companies, domestic sales orders have increased significantly compared with the previous period. Compared with last week, fabric dealers have received more customer samples and orders, and they have become busy. And most of the orders received are mainly for autumn and winter fabrics.
In terms of foreign trade, due to the repeated global epidemic, demand has decreased, and the order frequency and order The continuous shrinking of sales volume, coupled with Trump’s recent ban on transactions between US individuals or entities and the international versions of TikTok, WeChat and their Chinese parent companies, have caused textile people to have deep concerns about Sino-US relations. “I don’t feel any better. There are fewer proofs for foreign trade and fewer orders. Now half of the machines in our factory have been stopped. We are focusing on capital preservation. The global economy has not recovered, and the demand for clothing has also declined.” A cloth boss said helplessly.
Although the overall market recovery is not as good as expected, there are still bright spots to be found! Currently on the market, there are many orders, proofs, and inquiries for T400, T800, and four-sided bullets. T800, in particular, is undoubtedly a hot-selling product at this stage. Due to the shortage of its raw materials and the gradual maturity of the dyeing process, it has become the most popular among autumn and winter fabrics. A manufacturer of elastic fabrics said: “We have 200 looms, and the startup rate is always 100%, and orders are continuously placed. Recently, many customers have taken T800 from us, and there is basically no inventory.”
Profits of conventional products have fallen to the bottom, or even lost money!
After visiting, the company said that most of the orders on hand are autumn and winter fabrics. And they are relatively new products, such as conventional imitation memory and nylon fabrics, which perform mediocrely. A company that produces imitation silk and four-way elastic said: “The inventory has now exceeded 2 months, and the largest quantities are conventional chiffon and tangled hemp. Basically, each variety is more than 1 million meters, and the price has also dropped a lot. This year Compared with the beginning of the year, conventional artificial silk has generally dropped by 1 yuan/meter. There is basically no profit. Some are even selling at a loss.”
Many cloth bosses who produce conventional products said that so far, sales have dropped by more than half year-on-year. It is normal to have inventory for more than 2 months. And as time goes by, there is still a risk that inventory will continue to rise. This also means that inventory is difficult to liquidate and takes up a lot of funds. Once the funds are broken, it will easily be lost in the upcoming peak season.
It is precisely because orders are scarce now, in order to effectively control inventory and ensure that we can To “survive”, downstream traders and weavers are increasingly reducing production and taking holidays. “At present, our regular inventory has exploded, and we cannot sell it even after we produce it. The gray fabrics produced this year have basically not been touched. All are in stock from last year, and now only 60 machines in the factory are in operation (there are 100 looms).”
Since late June, many manufacturers have started summer vacation mode, and the operation rate in July has increased month-on-month. It has decreased from month to month, and the current activation rate is generally around 60-70%.
Next, the epidemic and production capacity are still two major problems!
There is still one month left before the “Golden Nine”. Regarding the next market situation, most cloth bosses believe that the epidemic will and production capacity are still the two key factors hindering the improvement of the market.
Affected by the epidemic, both domestic and foreign trade this year have suffered a serious blow. Production capacity has increased too fast, and the speed of terminal digestion has significantly weakened. This has resulted in the current cloth being unable to be sold and the price plummeting.situation. “The gray fabrics we sell now are basically all at a loss. There is no way. If we don’t sell them, we have no way to realize the inventory.” A fabric boss said helplessly.
“This year’s market really can’t afford to be hurt” has become the voice of many textile bosses. Although the market has partially improved now, can this wave of market conditions continue to improve? There is also a big question mark in everyone’s mind. The editor also believes that under this special market situation this year, the only way to reasonably control production and inventory is to ensure that you can survive first. The longer you persist, the more likely you are to see the day when the market picks up!
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