It coincides with the Dragon Boat Festival holiday. The country is enveloped in a holiday atmosphere, but the external market is not peaceful!
Let’s take a look at some recent hot news first:
1. The prospects for economic recovery are bleak, and the IMF has once again lowered its forecast for 2020. Global economic forecasts predict that global economic output will shrink by 4.9% this year, while the U.S. economy is expected to shrink by 8%.
2. Trump wields tariffs again! This time the target is Europe. It is reported that the U.S. government is considering imposing tariffs on $3.1 billion in goods imported from the United Kingdom, Spain, Germany and France.
3. The “black swan” that has the greatest impact on the global economy has not yet left, and the global epidemic is spreading. As of June 25, the number of confirmed cases of new coronary pneumonia in the world currently exceeds 9.39 million, and the WHO predicts that the number will reach 10 million next week.
The editor was writing an article before At that time, I always said, “The sun always comes after the storm, and the market will always be good”! A seemingly simple sentence, but it seems so heavy. Now that 2020 is almost halfway over, friends in the textile industry are increasingly frowning. The downturn of more than three months has left them with fewer and fewer “bullets” on hand! In the words of a textile boss: We are stretched thin!
70% of companies choose to reduce production and take a holiday during the Dragon Boat Festival
Before the Dragon Boat Festival holiday, the editor once made a According to a market survey, nearly 300 textile companies participated in the questionnaire. As a result, more than 60% of textile bosses said that sales in June were not as good as in May; 70% of companies chose to reduce production and take holidays during the Dragon Boat Festival; more than 30% of companies started operating less than 50%; more than 60% of people It is believed that the market will continue to weaken in July…
According to the monitoring data of sample enterprises of China Silk City Network, on the eve of the Dragon Boat Festival, the operating rate of looms in Jiangsu and Zhejiang showed a partial downward trend, among which the operating rate of Shengze water-jet looms was below 70% , Changxing water-jet looms also maintained at around 70%, Changshu warp knitting at around 70%, Haining warp knitting performed slightly better, maintaining at 70-80% start-up; Xiaoshao circular knitting performed relatively weakly, with the start-up rate remaining at 4 become nearby.
The operating rate of looms in the entire Jiangsu and Zhejiang regions is less than 65%, which is the lowest level for the same period in recent years. Compared with the same period last year, it dropped by nearly 10 percentage points.
It can be seen that today’s textile market is indeed immersed in the off-season atmosphere. Although the domestic and foreign trade markets have recovered to a certain extent in May, feedback from textile bosses shows that raw material prices continue to rise, but the gray fabric market has been “slow”. Even if there are orders, many of them are competing in the market at low prices. Later, the profits of weaving factories were too thin, and many companies purposefully reduced production to reduce the risk of regular inventory backlogs.
There are interceptors in front and pursuers in the back. The order is really “slow down a few beats”!
“I didn’t place a few orders this month, they were all market goods worth 10,000 to 20,000 meters. I was very fortunate to have a lot of inventory before last year, which I sold at low prices in the early stage. If it falls off, we will lose more if we sell it now.” said a trader who specializes in brushed pongee.
Another person in charge of a company with more than 200 looms in northern Jiangsu specializing in imitation silk said: “Our main customer is the United States. This year due to factors such as the epidemic and trade war, , our orders have shrunk by at least 50%, and now we are in the exhausting inventory stage every day. The warehouse has also stocked nearly 10 million meters of gray fabric, which is very stressful. We have a three-day holiday during the Dragon Boat Festival, and then we will take one step at a time. !”
The textile industry that is still swaying in the wind and rain can be said to be blocking before and pursuing after. Soldiers, environmental protection, trade wars, and epidemics are all “black swans” that will drag down the pace of market recovery. Today’s market conditions have prompted more textile bosses to take a holiday, which also proves that it is becoming increasingly difficult for manufacturers to operate.
Then, here comes the question: After the Dragon Boat Festival, how many weaving manufacturers will start production as scheduled?
“Currently, the decision whether I store it for 3 days or 10 days mainly depends on the raw materials. If the raw materials continue to rise, I will not prepare to stock up anymore and will use the raw materials on hand. It will depend on the situation after production is completed,” said a weaving factory owner.
It is true that the prices of raw materials and gray fabrics are seriously out of sync, eroding the already thin profits of gray fabrics, and further suppressing the enthusiasm of textile bosses for production. However, the vast majority of textile bosses plan to park for 3-7 days, and some for about half a month. In other words, in July, although the market operation has declined, the possibility of large-scale load reduction is still small. It can be said that It’s “the time has not yet come”!
“Our Dragon Boat Festival…�There is no holiday. Since this year, we have maintained a production load reduction of about 70%, and try our best to balance production and sales every day. However, it has been a bit difficult recently. It is estimated that orders received before July will be delivered. We can only follow the follow-up orders. The situation has improved, but it is unlikely to completely stop production or reduce production to less than 50%. After all, workers, depreciation and other factors have to be taken into consideration. “A home textile fabric manufacturer said.
It is reported that during the Dragon Boat Festival, Changshu warp knitting and Xiaoshao circular knitting machines have many partial shutdowns and holiday arrangements. The water spray plant is relatively okay during the holidays. It is expected that The labor start-up rate has dropped by 10-20%, while the warp knitting start-up rate in Haining has basically remained at the previous level.
Most textile people are still mentally prepared for the market situation in July. After all, based on historical conditions It seems that if there is a big market in the weaving market, it usually occurs in March-April and September-October. There is generally less big market in July-August, that is, in the off-season, the market will originally face the pressure of accumulated inventory. , but this year’s inventory pressure is too huge, and may not have been encountered in the past six years. Therefore, textile workers need to recognize their own position in troubled times and consciously limit inventory, rather than blindly produce and allocate funds. Turn everything into inventory to avoid falling into a difficult situation under competitive pressure!
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