Because of an epidemic in 2020, most manufacturing industries are in “dire straits”, but also because of an epidemic, some companies are “booming”!
How to be crazy?
Recently, an announcement picture of a Dongguan company went viral online. Affected by the epidemic, the company’s orders for mask materials have increased hundreds of times, and the order backlog has exceeded production capacity for more than 2 months. This has brought a heavy burden to the company. It has stopped accepting orders on April 1, and has negotiated with some old customers to refund and cancel some orders.
Customers paying without signing a contract has become the “sweetness” of this company “The burden” has made many colleagues who make other products envious. After all, most textile products on the market now have to be paid for in arrears and sold at a profit. The key is that no one wants them!
Melt-blown fabric, non-woven fabric, webbing, spandex, polypropylene… Get the goods in cash and wait in line!
Affected by the epidemic, the demand for masks at home and abroad has been growing since the beginning of the year. The demand for related raw materials such as non-woven fabrics, melt-blown fabrics, etc. has also increased sharply. The market Prices are also on an upward trend. At the end of March, due to the outbreak of the epidemic abroad, the demand for masks and protective clothing increased sharply, and orders for related products surged, leading to an imbalance in market supply and demand. Currently, most orders in many markets are purchased by foreign customers.
In addition to the skyrocketing prices, most of this type of products require Send the payment to the manufacturer about a week or even a month in advance to make a reservation. The mask industry is directly in the “hot” stage!
“Recently, I will come to Shandong every few days to collect non-woven fabrics, and then transport them back to Shengze for film processing. Now in many cases I have to queue up.” A trader in Wujiang area Mr. Chen said.
In fact, Mr. Chen recently traveled to Shandong to look for non-woven fabrics There are quite a few textile bosses who supply cloth. In their view, it doesn’t matter what they make or sell if they have money!
“I originally thought that April would be the worst month for the market. As a result, we arranged protective clothing fabrics in advance and reached cooperation with factories in Shandong, but it turned out to be the worst month. It’s been a busy month. Now customers pay for goods one week in advance, and I arrange delivery for them. Although the profit is not high, the advantage is that the funds are returned quickly. After all, other conventional fabrics are not easy to sell now.” Another trader Shang Ye said.
At present, most orders in many markets are purchased by foreign customers. Due to the tight market supply, related “substitutions” have also seen an increase in both volume and price. It is reported that the prices of some short fiber specifications have also been increased recently, which are used to replace es fiber. Previously, the price of es fiber increased from 8,000-9,000 yuan/ton before the holiday to 15,000-16,000 yuan/ton on April 5. On April 8 It has even risen to 30,000 yuan/ton, and the current market price has reached 65,000 yuan/ton.
Up, up, up! But for most textile bosses who have not been involved in this industry, the current market is really cold and cold! After all, the “hot” niche industry can hardly cover up the “miserable” situation of the big market!
After the Qingming Festival, in previous years the market would receive a wave of foreign trade orders for autumn and winter fabrics. However, there is no news this year. It can be said that it has entered the off-season in the traditional sense. Many foreign trade textile bosses said that customers are not in a hurry for the orders they have now. Some orders have been completed, but customers are not allowed to ship because of the epidemic, fearing that there will be no one to unload the goods at the port, resulting in particularly tight cash flow in the market, which is related to the small number at the beginning of the article. The textile companies mentioned by the editor form a sharp contrast.
“The market is still deserted recently. We make four-sided bombs, There have been no orders for imitation silk fabrics recently, and there are very few proofings. The inventory in the factory has been rising. Now we only run half of the machines and let the workers take turns. We hope to survive this month!” said Mr. Shen, the textile boss.
Not only are companies that make orders like Mr. Shen experiencing a lack of orders, but many weaving manufacturers that make market goods are also not feeling the improvement in orders. “In previous years, gray fabrics at this price would have attracted many middlemen to stock up on goods, but now there is still no movement. 300 pongee has dropped to 2 yuan, and there is still no one to buy it.”
No one cares about the drop from 2.30-2.40 yuan/meter in the early stage to 2 yuan. The entire industry chain is bearish on the market outlook. In addition, a large amount of advance capital is needed to stock up, which increases business risks., resulting in the current “historically low” market goods also facing a lack of orders.
During the visit, the editor also found that many stores in the market do not open at 10 o’clock. Some store owners stayed all afternoon and no one came to make samples. .
The market operating rate in Jiangsu and Zhejiang regions dropped to a rare low in April: the market operating rate in Shengze region remained at 60-70%, that in Changxing region was around 70%, and that in Xiao Shao area is 40% to 50%, Haining area is also below 60%, and Changshu area is around 70%. In previous years, March and April were full-scale production, and the average operating rate dropped by about 10% compared with the end of March. Compared with the same period last year, it fell by about 30%.
Afterword
Everyone is prosperous, and everyone suffers! In today’s textile industry, “some people are happy and some are sad” because of the epidemic. Although protective equipment is currently very popular, whether people in the industry or outside the industry see business opportunities, they swarm in, but the quality problems that come with it are also worrying.
Although supply and demand are currently tight and textile bosses are making a lot of money, it cannot be ruled out that when the epidemic passes in the future, the bosses who entered the market in the early stage have already made enough to leave the market, and the remaining Those bosses who have just entered the market or are about to enter the market may face product price cuts and overcapacity. The drama of “hot potato” becoming a “hot potato” is heartbreaking!
In short, the editor wants to say that investment is risky and you need to be cautious when entering the market!
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