“Recently, I heard that some factories in the periphery had too much inventory and they stopped! It was difficult to recruit workers, the rent was cheap, and there was too much inventory, so the boss stopped opening and was slow to prepare. Sell inventory slowly!” A textile friend told the editor.
The digestion and conversion of inventory has become the key to this year’s textile market. In fact, inventory has become a sword of Damocles hanging over the heads of textile companies, while the sword of peripheral manufacturers is heavier.
Boss Bu did the math and compared the accounts: Stopping production does not make a loss and saves money!
The shipment season was supposed to be ushered in, but in the end, production was suspended. Why is this? A friend did some calculations for the editor:
Take a textile factory with 100 looms as an example:
In terms of rent, the current factory outside The rent is 60-70 yuan/year/square meter, and the annual rent for a factory with 100 machines and a maximum area of 2,000 square meters is only 120,000-140,000 yuan;
In terms of wages, skilled workers earn 9,000 yuan/square meter. Monthly, new workers cost 5,000-6,000 yuan/month, but local workers are difficult to find and their technical level is not up to standard; generally, a factory needs to have 30-40 workers, so the salary cost for one month is at least 300,000 yuan;
Coupled with other expenses such as raw materials, water and electricity, financial management, etc., the cost of weaving per day is about 40,000 yuan, and the annual rent is only 140,000 yuan.
As for inventory, it is said that many factories in other places currently have inventories for more than 2 months, and some even for more than 3 months. The inventory pressure is quite high and a lot of funds are occupied. If the inventory is Based on the price of 190T polyester taffeta sold on the street at 1 yuan/meter, the inventory has occupied more than 2 million yuan.
Therefore, for some cloth bosses, instead of producing inventory every day that cannot be sold, it is better to stop the machine, sell the inventory, and withdraw funds. In this way, stopping production is not Lose money and save money!
It should be the shipping season, but there are rumors of production discontinuation!
Since 2018, many factory construction projects in other places have come to an end, a large number of new machines have been launched, and market production capacity has entered a stage of rapid growth. Therefore, in 2019, the production capacity of conventional chemical fiber fabrics has entered a “blowout” era. The “blue ocean” brought about by environmental protection has transformed into a “red ocean”, and the market was once dragged down by “overcapacity”.
From the sample data collected by China Silk City Network, it can be seen that in late March, the Shengze area entered the inventory accumulation stage. After entering June, although the market has destocked operations , but with little success every time, and the current market inventory is still at a high of about 39 days.
Inventory is at a high level during the year, and difficulties in destocking have become a “common problem” for weaving manufacturers, which means As a result, weaving manufacturers had a difficult time with orders in September. Although the market is currently in a seasonal transition period and terminal demand is rising, it is difficult to reverse the high inventory situation due to the imbalance between supply and demand.
The more machines there are, the larger the inventory base will be, and the more funds will be taken up. Companies that build factories in the periphery usually have hundreds or thousands of machines, so for them In other words, in such a turbulent environment, it is not surprising to reduce or suspend production. It is just a matter of time.
The market has only been around for half a month and it’s already over?
In fact, at the end of August, most weaving manufacturers’ gray fabric sales performed better, which was much higher than the “bland” market in early August.
In addition to conventional fabrics such as T400, there are voices on the market that other fabrics are also beginning to take off: a truckload of 300T pongee has been shipped! 228T polyester Taslan order received for 20,000 meters! A Korean customer placed an order and it was shipped to Vietnam, and another load of fabric was delivered…
Good news about shipments came frequently in the circle of friends, and the weaving manufacturers finally ushered in the inventory reduction period. state. But only half a month later, the market began to change direction. During the visit, many weaving manufacturers said that the delivery speed of goods has been slowing down recently, and the factory’s production and sales have begun to become unbalanced again.
“The market was a little better at the end of August, but now it’s bad again, and the inventory in the factory has begun to increase!” said Mr. Chen, a polyester taffeta business in Wujiang area.
Of course, more companies said that it is not that there are no orders at present, but orders are received at low prices, or whether the transaction price is acceptable to you. If you accept, you will get an order, if you don’t accept, you can only watch. Others do it.
For example, last year the profit of imitation silk gray fabrics could be 0.20-0.30 yuan/meter, but this year it has dropped to 0.05-0.08 yuan/meter. “The current orders are not only low in price, but customers are also demanding The debt time for gray fabrics has also become longer, and the profit is very low.” Mr. Yang, a trader who sells imitation silk in the market, said.
Autumn express orders and winter orders are about to end, and the market has begun to prepare for winter express orders and next spring and summer orders. At present, the improvement of the domestic market is still greater than that of the foreign trade market. In terms of foreign trade, the United States has increased tariffs��The impact on the domestic textile and apparel industry chain is still relatively large. Originally, some of China’s orders were transferred abroad. For example, orders from garment factories and fabric factories in Vietnam basically lasted for more than three months, while the growth rate of domestic foreign trade orders for fabrics was relatively slow. .
Overall, terminal demand still exists, but market consumption is changing, and whether the product meets the appetite of the downstream Determines whether your market ends! It is indeed a wise move for textile bosses to maintain a relatively healthy cash flow level this year.
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