A historic agreement was reached to reduce oil production. On the 8th, WTI crude oil opened at US$39.414. It opened lower and moved higher during the session, and the price once exceeded US$40. Polyester filament has experienced general growth, and production and sales have exceeded 100! Recently, there has been continuous good news about crude oil, and the polyester industry chain has been “ignited”, showing an upward trend.
Since the beginning of May, the price of polyester filament has stopped falling and rebounded. So far, it has increased by 1,000 yuan per ton. Nowadays, the era of low-priced raw materials seems to be gone forever, but the era of low-priced gray fabrics continues. This has caused a very embarrassing situation in the textile market. With high-priced raw materials producing low-priced gray fabrics, can companies avoid losing money? In order to cope with the losses caused by the cost difference, Boss Bu had to come up with countermeasures.
When gray fabrics suffer losses, some manufacturers close them
Some companies said that most of the gray fabrics sold recently It is the inventory of gray fabrics produced before May. Only the gray fabrics produced from the raw materials purchased during that period can be sold now without losing money and making a small profit. The gray fabrics produced from the raw materials purchased after May will be sold at a loss now, so we can only leave them and wait for the price of gray fabrics to recover before selling them.
A boss who produces conventional gray fabrics revealed: “The raw materials have increased so much, but the price of gray fabrics has not changed. The gray fabrics produced now are definitely losing money, about 0.3-0.4 yuan/ Rice. I can’t afford this price. If a customer wants the goods, I won’t sell them. I’ll keep them in stock and wait until the second half of the year to sell them.”
The gray cloth is sealed, and the inventory is accumulating
Since the beginning of this year, the inventory of gray fabrics in weaving enterprises has remained high. The most important reason is that the demand for gray fabrics has greatly weakened. However, the market has recently ushered in a wave of goods outflows, and the inventory of gray fabrics has still improved. One of the reasons is that some cloth bosses have closed the recently produced gray fabrics for sale. The looms are still in production, and the gray cloth is not sold in sealed trays, so the inventory is naturally accumulating. In addition, many companies may not have cleared all their inventories last year, which is just adding to the situation.
“Our factory has a large inventory of gray fabrics, seven to eight million meters. The main reason is that the price of gray fabric raw materials last year was too high , according to this year’s price, I will lose too much by selling gray fabrics, so I have been leaving it unsold. I sell all the products produced after the new year. The sales volume after the new year is not good, so the inventory is accumulating.” A person from Shengze area The gray cloth boss said.
The off-season period will usher in large-scale production reductions
If we follow the practices of the above-mentioned fabric bosses, all gray fabrics produced with high-priced raw materials will be If the inventory is not sold, the financial pressure in the later period will be huge. Coupled with the gradual weakening of the market and the deepening of the traditional off-season, production reduction seems to be their only way out.
“Now that raw materials have risen again, if the price of gray cloth does not rise, I will prepare to reduce production. There are currently 300 looms in production, and we will reduce production by at least half in the future, leaving about 100 looms for production. . Now most of our factories in Henan are under-operated, and the possibility of reducing the number of machines in the future is very high.” A gray fabric factory owner in Henan told the editor.
In addition to the high inventory of gray fabrics, the next July and August are the traditional off-season. Under such special market conditions this year, production reduction has already been It has become a common means for gray fabric companies to save themselves. This summer, perhaps more companies will join the ranks of production cuts. Once there is a large-scale production reduction in the market, gray fabric inventory will be alleviated to a certain extent. At the same time, if orders can improve in the second half of the year, I believe that the gray fabric market will soon return to its former glory.
Editor’s postscript
In the words of a cloth boss predicting the market outlook, gray cloth is “easy to rise but difficult to fall.” On the one hand, raw material prices are continuing to rise; on the other hand, the darkest moment of the global epidemic crisis has passed. From the current point of view, there are more positive factors than negative factors. Therefore, the most difficult stage of the textile market may be over, and after this off-season, the peak season may be coming.
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