First, let’s recall the prices of conventional textile fabrics from September to October last year: 50D four-way stretch 1.7 yuan/meter, 75D four-way stretch 1.8 yuan/meter , 100D four-sided elastic 1.6 yuan/meter, 75D 24T chiffon 2.3 yuan/meter, 50D high elastic pongee 1.3 yuan/meter, 75D high elastic pongee 1.33 yuan/meter…
Looking at it, there are few fabrics with prices exceeding 3 yuan/meter, but Those prices were gone just six months later. The prices of all kinds of fabrics have risen sharply. An increase of 0.3-0.5 yuan/meter is normal, and there are many cases where the increase is close to 1 yuan/meter.
The price of fabrics has skyrocketed since the end of the year, mainly due to the drastic changes in the prices of upstream raw materials and crude oil. The OPEC+ meeting ended last Friday, and Saudi Arabia voluntarily extended its crude oil production cuts. This prompted WTI crude oil prices and Brent crude oil prices to hit their highest levels in more than a year. At the same time, on the evening of March 7, a huge explosion was heard over the city of Dhahran in eastern Saudi Arabia. Saudi Aramco, the world’s largest oil company, was attacked by Yemeni Houthi armed drones. International oil prices rose again.
The previous wave of rising prices of raw materials and fabrics has not yet subsided, but oil prices have risen again. Downstream raw materials are already rising, so will fabrics continue to rise?
Textile enterprises: price increases are inevitable
For downstream For textile traders, the price increase of raw materials and fabrics after the new year will be too harmful. After all, the quotations from customers last year are still in front of them, but the prices will be adjusted significantly after the new year. It is natural that customers cannot accept it. Of course, it is not only downstream customers who cannot accept this. In fact, the weaving companies themselves are also miserable.
First of all, costs have risen sharply. Due to the impact of the epidemic, most weaving companies are unwilling to stock up on raw materials even though they were faced with low prices last year. Therefore, they will only The ability to use high-priced raw materials has also led to rising fabric costs. And the rising trend of raw materials continues, and the cost of fabrics will become higher and higher.
Another point is that the profit is not much, not much Weaving enterprises reported that although most of them began to increase the price of gray fabrics, the increase was partly due to the increase in raw materials, and the real profits did not increase much. Moreover, downstream customers do not accept excessive increases at all, and many customers even take the initiative to postpone or cancel orders to avoid losses caused by rapid cost increases. In this case, it is very difficult for weaving companies to try to use price increases to increase profits.
There is no profit anymore, so there is almost no flexibility in the face of rising costs. The only thing that can be done is to follow the prices of raw materials and follow the market. Therefore, as long as raw material prices continue to rise, fabric price increases are also necessary.
Poor sales, sales reappear
Price increase It can solve the problem of rising fabric costs, but it cannot solve the problem of downstream sales. After the new year, the entire market is looking for low-priced gray fabrics from last year’s inventory, but this type of gray fabric will one day be exhausted. High-priced gray fabrics will always enter the market, but for textile companies that have become accustomed to low-priced fabrics, the current high-priced fabrics are completely unacceptable. It may even be that the price of gray fabrics is too high, causing the entire market to decline.
For weaving enterprises, if the price of raw materials continues to rise in the future, the gray fabrics produced from high-priced raw materials will also become relatively low-priced fabrics, but if the price rises When the trend ends and raw material prices fall, this type of fabric will be stuck at a high level. Especially now that the downstream end of the textile market has not improved substantially, it is difficult to sustain price increases based solely on cost-driven growth. How to quickly move the gray fabric in hand has become a major concern for many weaving companies, so the extremely common sell-off in the market last year reappeared.
When the market improves and goods are shipped smoothly, there is no need to sell fabrics at low prices, but the current situation is that selling at low prices is difficult to drive goods. . First of all, the current price has far exceeded last year. Taking 100D four-sided bullet as an example, last year the market price was 1.6 yuan/meter, but now it is 2.4 yuan/meter. In addition, the price of 2.4 yuan/meter also requires a certain order quantity to be obtained. Orders of hundreds or thousands of meters cannot be obtained in the normal market. However, customers who can obtain this quantity are looking around for last year’s low-priced inventory of gray fabrics, and have little interest in selling such goods after the year.
In today’s market, price increases are necessary to balance costs, but the sales volume after price increases has made many companies It is difficult to accept. The recent drastic changes in international oil prices have brought a lot of uncertainty to the textile market. There is a high probability that textile companies in the future will not continue to follow the rise as they did after the year, but will maintain a wait-and-see attitude.
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