In terms of losses this year, both manufacturers and traders are losing money, but it stands to reason that manufacturers seem to be losing more. Many textile bosses have said: This year’s inventory is so heavy that we can’t breathe!
The situation of orders being “no-showed” still exists
Due to the special circumstances of the epidemic, the order volume has been reduced by more than half compared with previous years, and large orders of hundreds of thousands of meters or millions of meters are very rare. It is precisely because of this that the risks in the textile industry will be greater this year!
“We have a customer who placed an order for 500,000 meters of four-sided composite yarn with us some time ago. He originally thought he had received a big order, but it turned out After the cloth was woven, the customer only took 100,000 meters. The key is that half of the 100,000 meters was paid. If the customer doesn’t want the remaining 400,000 meters, we can only use it as inventory. We don’t want to sell the freshly woven gray cloth at a low price. Throw it out, what a loss!” A textile boss in Shengze area said helplessly.
Although it is no longer the case that customers have missed appointments this year It’s strange, but this kind of case only appeared when the epidemic first broke out. Now when the epidemic is stable, why do customers still miss appointments?
Clothing companies still lack confidence in the market!
According to the practice in the textile industry, customers will predict the next order volume. After all, it will take at least three or four days from order placement to shipment. Customers want their customers to get it as early as possible. The goods usually go to the manufacturer in advance to place an order.
According to related reports, because shoppers are still worried about being infected with the new coronavirus when shopping in stores, retailers can only repeatedly postpone purchases and plan to sell the remaining spring goods in the fall. basic clothing. Many well-known brands, such as the American sports giant Nike, the American fashion retail group PVH, and the American fashion luxury goods group Ralph Lauren, have stated that they will cancel some autumn orders. In fact, this phenomenon still shows that everyone has a strong interest in textiles. The lack of confidence in the market in the second half of the year directly led to the cancellation of orders!
Then if these rejected orders cannot be sold, it will not be a manufacturer at a loss! Although the demand has become smaller now, at least it is still stable. The textile boss should not have thought when he took the order: “Under such circumstances, he can still be “no-showed”!” He can only bite his teeth and swallow it, and now he With an additional 400,000 meters of inventory, the pressure is much greater.”
Funding pressure and inventory pressure make textile bosses distressed!
Since entering the off-season, some textile bosses have begun to complain that the number of orders has begun to decrease. Although the orders have decreased, the operating rate has not kept pace with the orders. The decrease is proportional to the decline. According to data monitoring from China Silk City Network, as of July 15, although the operating rate of weaving manufacturers showed a downward trend compared with June, the decline was not very large. Recently, it has remained at 67%. Although this year’s situation is special, there is only a 10% difference compared with the off-season in previous years. Of course, the reason why many textile bosses are reluctant to shut down the machines is that the money spent by shutting down the machines is more unfair than the money spent by turning the machines on. After all, if you continue to weave, you can still have inventory and sell in the future.
But this situation has also led to higher and higher gray fabric inventories. The accompanying financial pressure will also increase. The money spent is used to weave gray cloth, but what is obtained in exchange is not money. Over time, the funds cannot be recycled, and the burden on the textile boss will become heavier and heavier!
In short, judging from the situation of this order being missed, textile bosses still lack confidence in the market conditions in the second half of the year, which will also lead to the subsequent Orders may start to be canceled again, but the market situation this year is also elusive. Don’t think that the market will not improve. You still need to have confidence!
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