Recently, the international crude oil market has undergone drastic changes. Oil prices have been hovering at low levels, and the upstream textile raw materials have also fallen into a “deep pit.” However, high-quality and low-priced raw materials are not a good thing. After all, with shrinking terminal demand and lack of orders, most companies only have a stock of gray fabrics. The gray fabrics piled up in warehouses can only continue to depreciate in the price cuts of raw materials.
“Orders are God” is very common in markets where supply exceeds demand. And in the eyes of customers, it is obviously not enough to lower the price of gray fabrics just because of the drop in raw material prices, and further concessions must be made. After all, orders are limited, and who you give it to depends on the price. Market orders have not yet recovered, but price wars have quietly begun. Many companies are already selling at low profits or even zero or negative profits, just to reduce inventory and revitalize funds.
The price of gray fabric is lower than the dyeing fee
“The price of gray fabric exceeds the dyeing fee” is the consensus of almost all textile people, but the current textile market often shows that the prices of the two are inverted.
The current market price of 75D24T chiffon, a common imitation silk variety on the market, is roughly 2.2-2.4 yuan/meter. Before 2019, its price was basically maintained at 3.1 yuan/meter. Although the price fell to 2.8 yuan/meter in 2019 due to the sluggish market, it can be said to be sky-high compared to this year’s price. However, the dyeing fee for chiffon does not have a similar trend. Instead, it has remained stable at 2.3 yuan/meter, and some colors even have super-cost fees.
Although the price of chiffon gray fabric is falling, fortunately the dyeing fee has not increased, but there are still many situations in the market where the gray fabric has fallen and the dyeing fee has increased at the same time.
Take 210T polyester taffeta as an example. When the market is good, the price of gray fabrics basically remains at around 1.8 yuan/meter. Even if the market turns cold later, the price can still be guaranteed to be around 1.1-1.2 yuan/meter. However, this year it has fallen below 1 yuan/meter and remained at 0.8-0.9 yuan/meter. And its dyeing fee has quietly increased from 0.7 yuan/meter to about 1 yuan/meter.
Dyeing costs exceeding the price of gray fabrics are happening in the textile market, which also breaks the consistent view of most people. The dyeing fee is more valuable than the gray cloth, which to some extent will cause the value of the gray cloth to be underestimated. This is why when there is a “wave of cancellations” of orders in the market, many textile companies, in order to reduce losses, simply abandon gray fabrics and leave them in dyeing factories without picking up the goods.
Now that the price of gray fabrics is so low, should I stock up on gray fabrics?
The best time to buy at the bottom, but don’t dare to buy at the bottom
An important factor in determining the price of gray fabrics is the price trend of upstream raw materials, and the price of raw materials is directly affected by crude oil price impact. However, in the past week, oil prices have fallen below the bottom line and even have negative values. The possibility of such a market happening again in the future is no longer high. In other words, oil prices and raw materials are now at historically low levels, and the probability of them falling lower than now is slim. The price of gray cloth is also at a low that has not been seen in many years. This background and price seem to indicate that gray cloth has the conditions for storage and stocking.
But in fact, few traders are willing to stock up on gray fabrics. On the one hand, because the future foreign trade situation is unclear, hoarding gray fabrics requires funds, which affects the cash flow of enterprises.
On the other hand, long-term accumulation of gray cloth itself is prone to problems, affecting the quality of gray cloth. In addition, the fashion trends after the epidemic are unclear, and it is still unknown what types of fabrics will be popular. Blindly hoarding gray fabrics and occupying funds may cause companies to miss the market and fall into a passive situation.
Therefore, almost all companies have little interest in hoarding gray fabrics. Even if the WeChat circle of friends and WeChat circles are full of news of selling at low prices, few people care about it.
Although the current price of gray fabrics alone That said, it is indeed a low position and a once-in-a-lifetime opportunity. However, in the turbulent textile market, there are too many uncertainties, and the risk of bargain hunting seems to be greater. This also makes textile people who already lack confidence become more conservative. </p
