It is still necessary to have a deeper understanding of the current situation of the newly recovered textile market in order to better control the future. Let’s take a look at the market situation with Silkdu.com’s research.
01The operating rate has steadily increased to over 40%
First of all, what we are most concerned about is the starting load of looms in weaving factories. This week, after the 15th day of the first lunar month, the situation of delayed workers’ return to work and job vacancies has been effectively alleviated. Therefore, the start-up status of weaving factories this week has increased compared with last week. However, there are still job vacancies in some factories, and the increase in production load is limited. At the same time, due to the influence of policies, the start of construction has been hindered recently. Two factors lead to the low operating rate. According to data monitoring from Silkdu.com, the current operating rate of water-jet and air-jet weaving enterprises in Shengze is around 47.1%.
Mr. Hong, who specializes in Oxford fabrics, said that the current operating rate is only 60%. Workers are not yet in place and the load is difficult to increase. It will be increased to full capacity in the future.
“Currently, the factory’s operating rate is at 80%. Construction has just started and the entire market has just recovered. We will slowly increase the operating rate according to the market situation.” said Mr. Hong, who produces high-end linings.
There are also companies that receive orders well, so the looms are currently in full production. Manager Zhang, the head of a weaving company that produces polyester taffeta and pongee, told the editor that production and sales are currently balanced, all workers are in place, and orders are being placed continuously, so all machines are turned on.
Judging from the operating rates of the companies surveyed, it seems that the average operating rate of enterprises can reach more than 80%. However, due to policy reasons, tens of thousands of looms are still in production in the entire Shengze area, which has lowered the average operating rate.
02The situation of receiving orders is still divided.
Secondly, market participants are also paying attention to the company’s orders. It is understood that the current domestic trade orders have increased slightly compared with last year’s post-holiday period, but the increase is limited. Most of them are winter repayments. New orders in spring are only inquiries and have not yet been placed. At present, most of the orders placed by manufacturers are received before the holiday, and they are mainly rush orders. New orders are placed sporadically. Foreign trade has begun to increase its volume, and many export companies have begun to arrange orders. The cycle time ranges from more than 1 to 2 months, and even 3 to 4 months.
Mr. Yu revealed that the current order-taking work is still in the proofing stage, and no actual order has been placed. Mainly preparing for later orders.
Mr. Zhou, who produces nylon four-way elastic, said: “Currently, the order situation is normal, and orders are being issued continuously. There are quite a few, but they are not very popular.”
Manager Tang, who produces elastic fabrics, said that the orders have been scheduled until April. All the machines in the factory are turned on and there is no time to make them.
To sum up, we can see that the market situation is still showing a divergent trend. Some people keep taking orders, while others are waiting for orders to come. Judging from the situation of enterprises, the market is gradually recovering. Companies that have received better orders indicate that this year is a good start, and it also has a boosting effect on the later market trends.
03The pressure on corporate funds and inventory remains
Entering the new year, the market is also different from the previous year, and the market environment and pressure faced by enterprises are also changing. For enterprises, orders, inventory, and funds are three very important aspects, which determine the operating pressure of the enterprise.
Mr. Hong said that the current pressure faced by enterprises mainly comes from two aspects: capital and inventory pressure. We don’t have many machines, only 200, and the startup rate is not high, but we still have more than 30 days of inventory. Moreover, it takes a long time for customers to pay back their money, and there is a lot of inventory, so funds are very tight!
Mr. Zhou, who produces four-sided bombs, also told the editor that customers have lowered prices since the beginning of the new year. It is impossible to increase prices. On the contrary, the price lowering is even more serious. Therefore, the main pressure we face is declining profits and weak profitability.
“The market is still dominated by price competition, which has not changed much from last year. Competition is still fierce. The reduction in profits caused by price competition is naturally the biggest pressure at present.” Mr. Tang revealed.
The source of the pressure currently faced by the weaving end is still dominated by weak downstream demand and overcapacity. After three years of fighting the epidemic, although the overall market economy is recovering steadily, it is still not as good as before the epidemic, and people’s consumption concepts have also changed. Spending on clothing has decreased, which is difficult to change for a while. And retaliatory consumption only boosts the market temporarily and cannot change the market in the long term.
Mr. Zhang believes that with the liberalization of policies this year, domestic trade and export demand will improve, and foreign trade should also start placing orders. The market outlook is still worth looking forward to.
Mr. Hong holds a different view. He is not very optimistic about the market outlook. The current foreign environment is not very good and foreign trade orders may decrease.
“The peak season is still optimistic, but we can’t have too high expectations, because after all, the market has just started and it will take time to recover. The improvement in the market is mainly due to foreign trade decisions.”Trade is now being diverted in large quantities, and the return of these orders is the key. “Mr. Yu analyzed deeply.
It can be seen from Boss Bu’s prediction of the industry’s market outlook that he is still cautious. Although there are favorable factors, it is difficult for the global environment to be completely changed for a while, and it is still a tortuous and long road.
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