According to WHO data, there are more than 200,000 confirmed cases of COVID-19 worldwide and more than 8,000 deaths! More and more countries have declared states of emergency.
In the early morning of March 19, international oil prices continued to fall, with NYMEX crude oil futures closing down 16.25% at US$22.89 per barrel. Hitting a new low in nearly 20 years, it plummeted nearly 25% during the session. Brent oil closed down 7% at $28.2 per barrel.
These two major news are a blow to the newly recovering textile market. On the one hand, as the epidemic continues to develop, more and more countries have adopted blockade policies, and panic has intensified. The demand for clothing will naturally weaken, and many customers have begun to cut orders. On the other hand, as crude oil continues to bottom out, the price of polyester yarn has also fallen deeply, and the price of gray fabric has also shrunk.
Weaving factory: The cloth cannot be sold, but the expenses are still a lot!
At the beginning of the resumption of work, many bosses were very happy, thinking that they would make money when they resumed work. But less than a month after work started, many cloth bosses said: “Originally March was the time to destock, but this year the inventory is difficult to eliminate and orders have decreased. Now our gray cloth inventory has been 60 days old. The heat is slowly fading, and there is no end in sight for the next off-season.”
In addition to reduced orders, weaving manufacturers are also facing The cost is the loss, that is, the income is reduced, but the expenses are still large. “Labor costs are rising every year, and this year they have risen even more. We have increased the wages of workers by 200 yuan/month. It takes at least five years to train a skilled worker. Of course, we hope to retain them more. Others Factories are increasing, and we can only keep up.”
In addition to labor costs, the biggest expense is the raw material expenditure. For cloth bosses, they most hope that the raw materials will be stable, and the ups and downs will be fine for them. It has a huge impact. Polyester yarn has been falling. It has dropped by more than 1,000 yuan/ton from the beginning of the year to now. “Although it is cheaper to buy raw materials, the price of cloth is also accelerating in depreciation. I have already lost several dollars on the cloth in my warehouse.” One hundred thousand.” A cloth boss was secretly anxious.
Traders: Domestic and foreign trade orders have continued to decline or even been canceled
A nylon spinner A trader revealed: “Our order volume in Europe in the first quarter of this year fell by 20% compared with last year. Orders are expected to decrease in the future.” Coincidentally, another cloth boss also said: “Although we do not do foreign trade, we Our end customers are exporting to Europe, the United States and other places, which has indirectly affected us. Domestic trade this year is also difficult. Although several large fabric trading markets have basically returned to normal, the flow of people has dropped sharply, and it is difficult to find samples, There are very few people taking samples.”
Both domestic demand and foreign trade are sluggish, and both domestic and foreign orders are facing reduced or even canceled orders. A R&D-based trading company in Zhejiang revealed: “Orders in the first quarter of this year were reduced by at least 30%. At this time, we chose to practice our internal skills and start developing new patterns and processes to prepare for the second half of the year.”
At the same time, many traders are preparing to appropriately adjust the proportion of domestic and foreign trade this year and focus on domestic trade, which will inevitably lead to more intense competition in the domestic trade market.
Demand is shrinking, but production capacity is growing. This year we have to tighten our belts
It is reported that In the past two years, due to supply-side reforms, there has been a wave of elimination of water-jet looms in Jiangsu and Zhejiang regions. However, this part of the production capacity has not been eliminated, but has been transferred to the central and western regions. The number of water-jet looms transferred to Anhui, northern Jiangsu, Hubei, Jiangxi and other places in the past two years has exceeded the 200,000 mark, far exceeding the number of water-jet looms eliminated in the Yangtze River Delta region. It is understood that production capacity in 2019 increased by about 20% year-on-year.
Recently, some manufacturers are considering cutting production, which can alleviate the current situation of excessive gray fabric inventory for the market. Overcapacity directly leads to the overproduction of gray fabrics. It is becoming less and less valuable. “Business has been really difficult in the past two years. In the past, Nisi spinning could be sold for more than 4 yuan, but this year it can only be sold for more than 3 yuan, and the profit is only about 0.1 yuan/meter.” A Nisi spinning company The manufacturer said helplessly. It can be expected that many small and medium-sized enterprises will be unable to bear it and withdraw from the battlefield early this year, and companies with strong “immunity” will become stronger, and the polarization of the market will become more obvious.
Editor’s Note
A celebrity once said: “Setbacks will only make the strong stronger.” The editor believes that companies that have survived after the reshuffle of the epidemic must have extraordinary Strong “immunity”. After the epidemic, the concentration of the textile market will also become higher and higher. Next, textile companies still need to cultivate their own “internal skills”. Forging iron, they need to be strong. As long as the quality is excellent, I believe there will always be a place for you in the textile market.
