After the National Day, the textile market was booming, but this peak season did not seem to last for a month before it began to decline significantly. There are many textile companies in the market that have not caught up with the order wave in October, but have clearly felt the recent weakening of orders.
According to the person in charge of a functional fabric production company, they They are all doing export orders to Southeast Asia, but recently many customer orders have been suddenly canceled, with a total value of about 1 million yuan. In this year’s market, it is not too small, but more importantly, most of these orders have been produced in dyeing factories and are semi-finished products that cannot be withdrawn. When talking about how to handle this part of the order, the person in charge said helplessly that they can only make finished products first and sell them slowly. As for when it will actually be sold out, it is still unknown!
Downstream fabric trade began to experience reduced orders and suspensions, and quickly began to provide feedback to upstream textile companies. Some weaving factories in Jiangsu and Zhejiang have begun to experience cancellations of orders, reduced working hours of workers, and reduced incomes. And many bosses have begun to default on wages to their employees due to overstocked inventories and limited funds. Dyeing factories have also begun to adjust from a full liquidation in the early stage to a partial boom.
In order to revitalize funds, goods sales have begun to reappear
The entire state of the textile industry chain in front of us seems to be very different from when work was just resumed at the beginning of the year. resemblance. Order cancellations began to appear, and the operating rate of textile mills began to decrease. However, the status of textile companies at the end of the year is obviously different from that at the beginning of the year. After all, there are many places where money is needed at the end of the year, such as finishing and processing fees, transportation fees, workers’ wages, rent… All put forward requirements on the working capital of enterprises.
In order to maintain the normal operation of the enterprise, proper digestion of inventory and revitalization of funds are the only ways. As a result, sales that had subsided for several months began to appear again, and many of the fabrics that were sold were related to recent orders canceled by customers. However, the more such orders are placed, the harder it is to sell them.
Although such orders require high processing costs and undergo various processes, they cannot have unlimited plasticity like gray cloth. We can only find corresponding customers with full needs, but such customers are obviously difficult to find. Maybe the customers who want this batch of fabrics do not need other processes such as wrinkles or coatings, then this batch of fabrics cannot be sold, and ultimately They can only be sold to merchants who collect and dispose of cloth at low prices.
The closer to the Spring Festival, the phenomenon of selling goods in the market may It is becoming increasingly obvious that the prices of various product fabrics or gray fabrics will be hit again. This is obviously not good news for weaving factories that purchased large quantities due to rising raw material prices in the early stage. It will become very common to sell goods at a loss or even lose money.
Of course, the current textile market is going down like a roller coaster, which is inseparable from the epidemic and political issues abroad. Because of this, most of the currently affected orders are foreign trade orders. Does that mean that domestic trade orders can continue?
The prospect of domestic trade orders is worrying, and payment collection may be a problem
In fact, almost all orders in the textile market have decreased, but the decrease in orders from domestic trade is not as great as that from foreign trade. But it does not mean that the market outlook for domestic trade orders is necessarily good.
First of all, due to the impact of the epidemic in Southeast Asia and other places, many European and American clothing orders have been transferred to China. This part of the clothing orders are processed in domestic clothing factories, and the required fabrics are naturally purchased from China. Therefore, many textile companies will have the illusion that the fabric orders they are making must be domestic trade orders if they are sent to a certain city in China. In fact, this part of the fabric is likely to be used in European and American clothing orders and eventually exported.
Nowadays, due to the second outbreak of the epidemic in Europe and other places, the confidence of clothing companies in stocking has been damaged to a certain extent. It is reasonable for the wave of cancellations of clothing orders to occur. Companies that directly export fabrics can communicate directly with foreign customers and can get news of order cancellations as soon as possible. However, those textile companies that send fabrics to domestic garment factories and finally export garments often have more intermediate links and end up with I just found out about the cancellation of the order.
Even some domestic clothing companies, even if they know that the previous order has been cancelled, will not notify the fabric supplier immediately in order to avoid liability for breach of contract. Instead, various fabric problems are found through post-inspection, and then the order is canceled and the blame is placed on the fabric company.
Therefore, it seems that the number of cancellations of domestic trade orders is not large. It is likely that the news of cancellations has not yet been fully transmitted. And our garment industry is highly dependent on exports. With the global economy sluggish and orders reduced, funds are naturally incomparable to previous years. One of the reasons why domestic trade orders have always been criticized is payment arrears. This year,��The situation may be more obvious. If the domestic trade orders we are making now are difficult to recover at the end of the year, then it would be meaningless to look at things in the smoke.
When the overseas epidemic has not improved at all, and has even intensified, Cancellation of terminal clothing orders will be inevitable. At present, order cancellations have appeared again in the textile market. Whether there will be large-scale order cancellations in the future cannot be underestimated. Even if the order in hand comes from China, you still need to be careful.
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