As a “heavyweight” player in the textile market, Chunya Textile occupies “half of the country” in the textile market. Especially in 2018, Chun Yafang got rid of the “bad cloth” label and became a hot “Internet celebrity” product. Prices have skyrocketed, and stockouts have become the norm. The looms are too late to deliver, and the dyeing factory’s delivery time is as long as 20 days… …
But the “spring of bad cloth” did not last long. This year, peripheral looms have emerged, and the number of peripheral looms has at least nearly Hundreds of units, producing the most conventional varieties, with large quantities and low prices, suddenly impacted the entire textile market. The market is in a slump, manufacturers are struggling to maintain production and sales, prices and profits have both shrunk, and the first to bear the brunt is pongee products with “zero stress resistance”.
As the end of the year approaches, Chun Yafang What happened? Today, weaving manufacturers have something to say!
The loom is in high-load production, and the inventory is still millions of meters!
Towards the end of the year, many weaving manufacturers actually have very few orders in hand. However, due to various factors, weaving manufacturers have to In time, I stood up for the last post. During the survey, we learned that the current looms of pongee manufacturers are basically under high load, and most of them are in inventory, and the inventory is as high as millions of meters.
Mr. Shi, who owns 270 looms, said: “What we mainly do is pongee and polyester taffeta, covering both domestic and foreign trade. This year The market situation of pongee is so bad that we just run the volume. Now the orders on hand are basically finished, but the machines are still fully operational and we cannot reduce the load casually. The inventory is nearly 3 million meters.”
Manager Xu, who specializes in pongee, nylon, regenerated pongee, regenerated nylon and other products, also revealed that our company’s pongee is also having a hard time this year, with prices and Profits have shrunk severely. Sino-US trade has been up and down this year, and export orders have also been hampered. The machines are now fully operational, but there is also a lot of inventory, about 1 million meters.
This year’s Chunya Textile shipments are slow. Downstream traders basically place orders in the “small order, multi-batch” mode, but the machines cannot be stopped, and the high Under load production, the inventory of weaving manufacturers is high, but the market cannot fully digest it. During the off-season, pongee is “sold cheaply”, and some companies even say that low-priced pongee has to be forced on customers, otherwise it won’t be sold at all.
The price dropped by 30%, Profits shrunk by 80%!
When it comes to market conditions, price and profit are naturally inseparable. This year, weaving manufacturers generally report that pongee prices have dropped by nearly 30%, while profits have dropped directly from 100 yuan/unit last year to the current 20-30 yuan/unit. Can’t bear to look at it?
Price comparison chart of various specifications of pongee products in 2018 and 2019
A warehouse manager who specializes in pongee and polyester taffeta said: “The sales volume of pongee has dropped really sharply this year. 300T The pongee sold for 2.8 yuan last year without invoicing, but this year it is only 1.8 yuan; the 190T pongee sold for about 2.0 yuan last year, and now it only sells for 1.6. The pongee itself is about volume, and there is no profit, so this year it can only Save your capital.”
At the same time, Mr. Weng, who owns 300 looms, also said that this year’s high-end pongee is selling better than conventional ones, but the volume of shipments is very small and it is difficult to keep inventory. Not only has the price of conventional pongee dropped by about 30%, but the profit of each machine is only about 20 yuan, which is simply incomparable to last year.
In July and August, pongee stockings can be seen everywhere in the market, and it is not uncommon to clear inventory at a loss. In September and October, the market improved slightly, but in fact the improvement was not great. Products with higher added value such as T400, T800, four-way stretch, etc. were still popular. Conventional products such as pongee could not be sold. No matter how conventional the product is, it is designed to sell at a low price and sell high volume. In this year’s market situation, we can only protect our capital and maintain normal operations.
Last year, due to the rectification of water-jet looms, there was a serious shortage of goods in the market. Only pongee can sell at high prices and manufacturers have the right to speak. Now the production capacity is extremely excessive. , compared with last year’s prices and profits, weaving manufacturers are really sad.
For weaving manufacturers, they have to worry not only about price and profit, but also the collection of receivables at the end of the year and the plan to stock up on raw materials. For weaving manufacturers, cash is needed to buy polyester yarn, but downstream traders can get the goods in arrears. At the end of the year, a game of debt collection begins.
In this year, I heard a lot of cases where the money owed was not paid, or was simply ignored. But after research, it seems that it is not that bad. Most manufacturers said that last year they basically settled in cash, but this year the market is not good and upstream traders are not fully funded.��, downstream weaving manufacturers want to increase their inventory, so this year they are basically in arrears. However, the debt payment cycle is basically 1-3 months, mainly for old customers, but everyone is short of funds, so the payment recovery cycle is relatively slow. For example, a debt of 300,000 yuan could be recovered in one month last year, and this year It may take 3-4 months.
Whether you get your money back or not is related to whether you buy polyester or not. According to the practice of previous years, polyester manufacturers have promotional discounts at the end of the year, and basically increase prices at the beginning of the year. Therefore, weaving manufacturers will basically stock up on raw materials before the beginning of the year to prepare for the beginning of the new year. However, raw materials have been falling this year, the prices of various polyester filament products have dropped significantly, and the room for losses continues to expand. Falling prices of raw materials will drive down the price of gray fabrics at the same time. Inventory prices have fallen, and the final payment has not been collected. Manufacturers do not have so much funds to buy raw materials.
This makes weaving manufacturers feel guilty I’m confused, should I stock up on raw materials at the end of the year? It’s so difficult!
There are 100 looms. Mr. Shan, who specializes in pongee spinning, told the editor: “In previous years, we have stocked up on raw materials, but this year we will not. We are ready to stock up on raw materials. We really can’t sell pongee this year. We have 900,000 meters of inventory in our factory. Now that the orders have been completed, the price of raw materials has been falling. If the raw materials fall, the gray fabric will also fall. There is no guarantee at all. Let’s see after the New Year.”
But there are also many weaving manufacturers who have different ideas.
Mr. Tao: I will definitely buy it. I estimate that I will stock it for half a month to a month. The specific price depends on the price of raw materials. Generally speaking, At the end of the year, raw material factories will cut prices and sell goods, so we are not in a hurry to stock up now. I have bought a little bit of raw materials these days, and the factory can use them for about a week. In the past, the operation started one week before the holiday.
Mr. Wu: Although you can buy and use as you go now, in order to prevent price increases after the year, you still need to buy some spares before the year, which usually lasts about a month. The amount and funds are insufficient, and the market situation next year is unclear, so I won’t hoard too much.
After New Year’s Day, most weaving manufacturers are preparing to take a holiday. This year’s market is coming to an end. What will happen next year is unknown, but most textile people predict Next year may not be too good either. Overcapacity and market demand determine the “fate” of Chunya Textile this year. The cake is so big, and if there are too many people sharing it, naturally there will be nothing to eat. For fabrics like pongee, which are extremely conventional, if we don’t change the pattern, weaving manufacturers will still be under great pressure if they want to improve next year.
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