The first week of August has passed, and the market has still not turned around. Printing and dyeing factories have seen news of production shutdowns one after another.
The business performance of the printing and dyeing factory largely reflects the market situation. How can the finished fabric be finalized if it is not finished by the hands of the printing and dyeing factory? I thought that the market situation would improve slightly after the arrival of August, but the actual situation does not seem to be satisfactory.
There is a lack of orders and printing and dyeing are still in the off-season.
Lack of orders has been a problem this year. Although the traditional market peak seasons of September and October have not yet arrived, judging from the recent performance of the printing and dyeing market, this wave of market conditions may not last long even if it arrives. Orders in September and October are often for autumn and winter fabrics. But this year’s autumn clothing may be difficult to achieve the same peak season as in previous years.
This spring, the entire sales season was missed due to the epidemic, and a large number of clothing company warehouses were filled with spring clothing inventory. Some of them change some spring clothes into autumn clothes for sale, or simply resell them as they are, which leads to a significant reduction in demand for autumn clothes. The future of autumn orders is so uncertain, so naturally there is a serious lack of stamina for printing and dyeing orders in this area. But what is even more alarming is that if the spring clothing inventory in the first half of the year cannot be digested well this autumn, it is very likely that this part of the inventory will be transferred to the next spring. If you miss two peak seasons this year and miss next year’s spring market, the market will be even more miserable.
Manager Yao of a printing and dyeing factory told us: “The current order situation is not very good, with a decrease of 20-30% compared to last year.”
Manager Sun from another printing and dyeing factory also said: “Currently, orders are generally accepted, much worse than last year, with a decrease of more than 30% compared to the same period last year.”
Mr. Shi also said: “Orders have dropped by about 20% year-on-year.”
The operating rate drops, but dyeing costs remain strong
The production status of dyeing factories is the most intuitive feedback on the textile market. This year, the overall printing and dyeing market is in poor condition. The operating rate of printing and dyeing factories is only 40-50%, and some dyeing factories still only operate at night and rest during the day.
July and August are the traditional off-season for textiles. While orders continue to decrease, dyeing factories cannot even attract orders by reducing dyeing fees. The main reason for this is that the price increase of bulk chemicals is too outrageous, causing the cost of dyes to remain high. Printing and dyeing factories cannot gain customers by reducing dyeing fees, and can only watch their business being lost to other printing and dyeing companies with lower dyeing fees. The factory took away business.
Manager Sun said: “There is no discount on dyeing fees. We will not consider discounts for the time being because the cost has not dropped.”
Mr. Shi said: “There is no discount on dyeing fees. We are not considering discounts at the moment.”
Manager Niu said: “The dyeing fee has not changed since the beginning of the year and will not continue to increase. Our dyeing fee itself is considered cheap and it should not be discounted anymore.”
The order volume is limited, and continuing to reduce production capacity is not a long-term solution. Dyeing factories do not have the same cost advantage as weaving factories. With the price reduction of upstream chemical fiber raw materials, weaving companies can confidently lower the price of gray fabrics significantly. However, the price reduction of dye costs in dyeing factories is quite limited. Secondly, the production costs of dyeing factories are scattered, including rent, water, electricity, gas, labor, fire protection, environmental protection, etc., which are very complex. Dyestuffs alone are not enough to have much impact on dyeing costs. Dyeing factories that take the initiative to significantly reduce prices may sacrifice a lot, but they can only make a profit at a loss.
In short, it can be seen from the increase in proofing in dyeing factories, and some orders have been started. The market is one step closer to exiting the off-season, but whether the market can recover still needs to wait.
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