In the early morning of August 20, the Federal Reserve released the minutes of its latest July meeting: The economic recovery may not be as strong as expected, and epidemic control is the key. The minutes showed that the FOMC expressed concerns about the prospects of the U.S. economy during the COVID-19 epidemic, predicting that the epidemic may continue to suppress economic growth and impact the financial system.
The past two weeks have been during the peak vacation period. The COVID-19 epidemic in many European countries has begun to rebound significantly, and the epidemic situation in Italy and other countries has continued to decline. The good trend is taking a turn for the worse, and the epidemic continues to spread in the Americas. The COVID-19 epidemic has rebounded and the impact of the second outbreak has not dissipated, which will pose certain obstacles to the recovery of the global economy in the second half of the year. This will become an important negative factor affecting the future of the textile market. The “Golden Nine and Silver Ten” have entered the countdown. Will it really come as scheduled?
This year, textile companies are “suffering” to get rid of inventory and “suffering” to wait for the “Golden Nine and Silver Ten” Arrive, “suffering” for customers’ payment to be in place… There were signs of improvement in the market at the end of July. Now it has entered late August. There are less than 10 days left before the traditional textile peak season of September, but textile people seem to be still “suffering” “Reading.
Weaving enterprises cannot bear it any longer and have started to reduce or suspend production
“Inventory” is an unspeakable pain for weaving companies this year, and the topic in the textile industry also revolves around inventory. According to data monitored by China Silk Capital Network, the current inventory of weaving manufacturers is about 45-46 days. Under the high inventory, the opening rate is still maintained at around 60-70%, and the stubborn cloth boss is struggling.
In addition to suffering ” “Look, weaving manufacturers are not idle. From time to time they lower prices and sell goods, and they have to make up for their losses! Therefore, market prices have been relatively chaotic recently, with high and low levels. But the overall price has been pulled down, the price advantage has been lost, and destocking has also failed. Finally, under the superposition of the traditional off-season and high temperature effects, some manufacturers began to reduce or suspend production.
A factory with only 30 air jets producing cotton interwoven fabrics. Even though the shipment of autumn and winter fabrics has increased slightly recently, it is still unable to cope with the pressure of high inventory, and the operating rate is only 70%. Another factory with 200 looms suspended production for five days last week to relieve inventory pressure.
Trading companies are struggling, and the payment collection cycle is further extended
Except Due to inventory pressure, one of the major pains that textile companies face is payment collection. If funds are not withdrawn, they cannot pay wages or buy raw materials. In serious cases, the company will be paralyzed. The payment cycle of traders is generally longer than that of weavers. Under the influence of the epidemic, the payment cycle of traders this year is even longer than in previous years.
The person in charge of a foreign trade company exporting to Western Europe revealed: “The payment collection situation of foreign traders this year is indeed unsatisfactory. In previous years, the payment cycle was about 2 months, but this year it is longer than in previous years. 1 month to 3 months. The extension of the payment cycle and the reduction of orders by about half compared with previous years really put a lot of pressure on us.”
The payment cycle of the domestic trade market is relatively different from that of previous years. In terms of foreign trade, there is more variability and the cycle has also been extended. In previous years, the payment collection cycle for domestic trade generally ranged from 1 to 3 months, but there are also some longer periods, such as 3 to 6 months, or even 1 to 2 years or bad debts. Under the influence of the epidemic and the economic environment, the payment cycle this year will be extended by at least one month, or by several months at most. Textile companies are struggling to get their money back, but if they continue to struggle, their workers may not be able to make ends meet.
When will textile companies survive the “Golden Nine and Silver Ten” years?
Textile companies are struggling and struggling, and are about to look forward to the traditional peak season of “Golden Nine and Silver Ten”, but are they really going to survive? Judging from the current market situation, autumn and winter fabrics have begun to pick up slightly, especially elastic fabrics such as four-way elastic, T400, T800 and other orders are relatively popular. However, in recent macro events, in addition to the recurrence of overseas epidemics, the Trump administration has recently refused to acknowledge its plan to meet with China on the first-phase trade agreement, which means that Sino-US trade export orders may be reduced again, and even affect China’s export orders to global trade. These negative factors will have a certain impact on the peak season in the second half of the year, and the popularity of the “Golden Nine and Silver Ten” may also be reduced.
Following J.C. Penney and Lord & Taylor, Stein Mart, a century-old discount retailer in the United States, recently announced its application The bankruptcy protection was due to a challenging retail environment coupled with the impact of the new coronavirus pandemic. The century-old store eventually lost to the epidemic and eventually went bankrupt.
As more and more foreign brand retailers close down and go bankrupt, it reflects that traditional retailers have lost their appeal. The characteristics of consumers and the foundation of physical retail have been shaken, and the entire industry has been in decline. Under the impact of the epidemic, people go shopping less and less, and market demand is also decreasing. The epidemic has increased the pressure.
The lower halfThere are many negative factors in the market, so this year’s “Golden Nine and Silver Ten” may not allow Mr. Bu to destock as he wishes, but the phenomenon of selling goods at low prices may still be significantly reduced. After all, the end of July ushered in a surge in autumn and winter fabrics, and this wave of momentum continues to this day and is not fleeting, indicating that demand is indeed picking up. Moreover, the domestic economy is becoming more and more stable, and the domestic sales market is gradually opening up. The market is still promising.
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