This year’s epidemic has disturbed the entire market. On the one hand, foreign countries are gradually resuming work and production, market demand is gradually recovering, and raw material prices are gradually rising;
On the other hand, The inventories of weaving enterprises are high and the price of gray fabrics cannot rise. Under such circumstances, where will the market develop in June?
When the resumption of work abroad encounters the traditional off-season, where will the market go?
Domestic trade begins to recover, and foreign production begins to resume
With the The domestic epidemic has gradually been brought under control, people have begun to gradually resume their previous living habits, and consumption of clothing has also begun to gradually pick up. The orders in the market can also well support this phenomenon. Starting in May, some weaving companies said that the order situation had improved significantly compared with March and April, and the orders received were basically domestic orders.
In terms of foreign trade, as European and American countries gradually resumed work and production in April and May, the foreign trade market also showed signs of recovery. Although due to the habit of early consumption in Western countries and the lag in the market, there are currently not many actual orders placed. However, some bosses said that the number of customer inquiries in the market has increased significantly recently, and in the face of the current crisis, The low price of gray fabric dyeing fees expresses a relatively obvious intention to place an order (for customers with real needs, the current price is too good).
Raw materials are rising, but cloth prices are falling
Affected by the epidemic and the price war between oil-producing countries, by April, international oil prices were suppressed to extremely low prices, and even negative oil prices for the first time in history.
Since May, with the recovery of domestic trade and the resumption of work and production abroad, international oil prices have sharply corrected, and the prices of polyester raw materials have also increased. Although there have been some relapses, The overall price of polyester yarn is still in an upward trend.
However, the price of raw materials has increased, and it is difficult for cloth prices to rise all at once. Manager Wang, the person in charge of a weaving company with 200 water-jet looms, said that although orders have improved since May, production and sales are still uneven, and inventory has increased instead of decreasing. So far, nearly 3 looms have been piled up in the warehouse. months of gray cloth inventory. Under such circumstances, although raw materials have risen, cloth prices have not risen at all, and the overall trend is even falling.
The market has entered the off-season, and demand is difficult to pick up in the short term
The time is about to enter June. According to the experience of previous years, June, July and August are the traditional off-seasons of the textile market. During this period, weaving companies often choose to stock up for the market in the second half of the year, and part of the inventory Higher weaving enterprises will choose to appropriately reduce the startup rate.
Therefore, although market demand is decreasing due to the impact of the epidemic, due to the seasonal cyclicality of the textile market, it is still difficult for market orders to pick up quickly in the short term.
This has created a strange situation in which the textile market environment is expected to be good, but orders may be difficult to recover within a few months in the future. This situation has also caused textile people to Troubled in many ways.
It is difficult not to have an order, but it is not easy to have an order.
Quote The worse it is, the slower the repayment will be.
Cash flow is related to whether the company can survive. It can be said to be the biggest headache for most companies now, and the tight cash flow is mainly due to There are two reasons.
On the one hand, due to insufficient market demand, the goods produced by weaving enterprises cannot be sold, and the funds are converted into full warehouses of inventory, which cannot be circulated well. The required sunk costs cannot be reduced at all, which ultimately leads to less and less funds on hand;
Secondly, because end consumers do not buy it, traders cannot receive the benefits. The money sent by downstream companies will naturally not be delivered to fabric merchants and gray fabric merchants. Therefore, there is a saying that the worse the market is, the longer it will take for companies to pay back their money.
The price of cloth has dropped too much, and the completion of the order is in doubt
In addition to the lack of market orders due to poor market conditions, the editor also learned of another situation where orders are not placed even when there is demand.
At the beginning of this year, due to the impact of the epidemic, some foreign trade customers chose to postpone their orders. As foreign countries have recently begun to resume work and production, demand has gradually recovered, and these orders have become a big problem. question.
On the one hand, this batch of goods is indeed needed by foreign customers. The contract has even been signed and the cloth has been made and is waiting for shipment; on the other hand, due to the recent The price of raw materials has plummeted, and the price of dyeing has also become much cheaper due to the off-season. The current price of the same fabric may be more than 50 cents per meter lower than the price in the contract.
In this case, the customer does not want the goods, and the customer wants to follow the contractThis situation is common in today’s market.
The epidemic has the risk of a second outbreak
On May 28, real-time statistics released by Johns Hopkins University in the United States showed that as of about 6:30 on May 28, Beijing time, there were a total of 5,651,806 confirmed cases of COVID-19 globally, and a total of 353,414 deaths;
Among them, the United States has a total of 1,695,776 confirmed cases and a total of 100,047 deaths;
Italy has 584 new confirmed cases of new coronavirus pneumonia, with a total of 100,047 confirmed cases. 231,139 cases, 117 new deaths, and a total of 33,072 deaths…
It can be seen that the foreign epidemic is still not effectively controlled. As Europe and the United States resume work and production under such circumstances, the probability of a second outbreak of the epidemic is very high. Once the epidemic breaks out again, whether the foreign trade demand that has just shown signs of recovery will be suppressed again has become a very worrying issue for textile people. .
During the visit, when it came to how the market will develop next, the views of textile people were polarized. Situation:
Some textile people believe that with the resumption of work and production abroad, the market recovery is just around the corner. Even if June and July do not improve, orders will be placed one after another starting in August. , there may even be “retaliatory demand”;
Other textile people believe that because there is a large amount of conventional product inventory in the market, it is difficult for terminal demand to digest these inventories at once , so the market will not get better this year.
What do you think of this? </p
