The “May Day” that has passed is the longest holiday that almost all textile workers have ever had. Three days is common, five days is not uncommon, and seven days can be available. But holidays are not always accompanied by happiness and joy for textile workers. For example, this time, according to research companies, affected by the overseas epidemic, so far this year, orders have generally decreased by at least 30%, and more companies have even dropped by around 50%. . Reduced orders, overstocked inventories, and lack of funds have continued since the beginning of the resumption of work, making it difficult for some textile workers to fully relax and enjoy the long vacation.
Now that the holiday has ended for more than a week, textile workers have already been in place, and there are also reports internationally that some countries have begun to relax restrictions. Is there any sign of improvement in fabric demand?
There are no signs of improvement in foreign trade, and domestic trade is taking the lead in large orders
Foreign trade has always been an important part of textile orders, and this is true for all textile off-seasons this year. Seriously, the main reason is the weakening demand caused by the raging overseas epidemic. Although many countries have begun to gradually relax travel restrictions recently, the economy has also begun to slowly recover. But “foreign trade orders have not improved” is the unanimous answer of almost all the companies surveyed.
Foreign trade orders have not picked up yet. On the one hand, this is because countries with limited demand such as Norway, Spain, and Austria are now relaxing travel restrictions. However, large demand countries like the United States have not yet fully relaxed restrictions, so large orders cannot be placed immediately.
On the other hand, even if overseas countries relax restrictions, economic recovery will take some time. In particular, the pace of life and production in some foreign countries is relatively slow, and it may take longer to resume production and work. This also invisibly resulted in textile foreign trade orders not being transmitted to the fabric end in a timely manner.
However, domestic trade orders have shown many outstanding performances recently. According to the person in charge of a company, they are engaged in nylon spinning. Although there have been no foreign trade orders recently, they have hundreds of thousands of domestic nylon spinning orders. Another textile company has the same feeling. They mainly make imitation silk and other products. The company has not yet carried out foreign trade orders, but it is currently producing more than 300,000 meters of domestic women’s clothing fabrics every month.
The signs of loosening in the domestic trade market are already very obvious, and as our country’s economy recovers gradually from the impact of the epidemic. Domestic trade orders may explode across the board, and foreign trade orders will also be issued one after another as overseas work and production resumes.
The inventory of gray fabrics is polarized, and the operating rate is still at a high level
Unlike the situation where most textile companies take a long holiday during the May Day holiday, not many weaving companies take a holiday. Even the holidays in the surveyed companies are generally not very long, mostly lasting about one day.
But the inventory is not unified and differentiated obviously. Some companies only have 100,000 meters of gray fabric inventory, or even none; some have production in 50 or even 60 days. Such differences are mainly due to different sources of orders. Enterprises with less inventory of gray fabrics are mostly due to the large number of domestic trade orders they are currently making, which consume most of the inventory; enterprises that also rely entirely on foreign trade orders have low demand at this time, and insufficient quantity of gray fabrics has caused greater inventory pressure. .
Although the inventory of gray fabrics varies significantly among companies, the availability rates are all at a high level. Among the surveyed companies, some weaving mills are at around 80%, and some are even operating at 100% production, and have no plans to reduce production in the short term.
In the final analysis, it is still a matter of cost. Although we have always believed that suspending production, reducing production, and taking workers off will definitely reduce costs and reduce expenditures, in fact these alone are not enough. Although these expenses cannot be avoided when the factory is started, gray fabrics are also produced at the same time, and most chemical fiber gray fabrics are easy to store and are suitable for long-term stacking. Blindly suspending production will not only avoid expenses such as rent, machine depreciation, social security, employee subsidies, etc., but will also face the embarrassing situation of not producing a single meter of fabric. Therefore, it is understandable that the weaving mill will not stop production and operate at a high rate.
The weaving operation rate is high, but the demand for raw materials is not strong.
The operating rate of weaving enterprises has always been a benchmark for raw material demand. When the operating rate is high, the demand for raw materials will be high. If the operating rate is low, the demand for raw materials will naturally be low. However, although the operating rates of the companies surveyed this time are generally high, their enthusiasm for purchasing raw materials is relatively low.
“We have 60 days of gray fabric inventory, and the looms are currently running at full capacity, but we only have 10 days’ worth of raw materials, which we just bought recently.” said a person in charge of a weaving factory. Another weaving factory’s recent orders are OK. The inventory of gray fabrics is not large, only about 100,000 meters, but the raw materials are only enough for 3 days. The current attitude of most weaving mills towards raw materials is to buy and use them as they please, with the longest reserve not exceeding 15 days, and their enthusiasm for purchasing is generally low.
In fact, the demand for raw materials from textile mills is not strong, mainly due to the negative impact of the continued low price of raw materials. According to a weaving factory owner, they had reserved 30,000 tons of raw materials before the year, but later the epidemic and the crude oil price war led to…��Raw material prices continue to fall. They are losing money every day they work with the raw materials in hand, and now they have no confidence in stocking up on raw materials.
On May 5, raw material prices rose across the board due to the rebound in crude oil prices, with polyester filament generally rising by 50-150 yuan/ton. The market, which has always been “buy up but not down”, also performed generally this time. Production and sales immediately returned to lightness after being prominent for two days. Before the demand for orders has not substantially improved, it is difficult to stimulate the enthusiasm of textile mills to purchase large quantities of raw materials based on the rise and fall of raw material prices alone.
Although the current textile market is still in the off-season overall, Frequent domestic trade orders have begun to stir up the entire market, gray fabric inventories have been consumed, and the startup rate is at a high level. And as more countries gradually relax travel restrictions and resume work and production to a deeper level, it is highly likely that a large number of foreign trade orders will be issued. When the demand for fabrics really starts to recover, the prices of upstream raw materials may really start to rise, and production and sales will flourish! </p
