The textile market in June seems to have reached a watershed again. Many textile bosses are currently fighting in the market. They seem busy, but the profits are lower or even no profit at all. This may be the beginning of another round of reshuffle. .
The weaving market is divided into two levels, and the profit situation is worrying
Jiangsu Gray Fabric: Currently, enterprises are operating normally and the operating rate is close to 100%. Product market prices are generally stable, yarn price increases are not transmitted smoothly, gray fabric prices are difficult to increase, and profit margins are limited. The order volume is about 3 months, and the product inventory is about 1 month. The market of knitted fabrics is better than that of woven fabrics. The market is expected to remain stable in the near term.
Guangdong Denim: The price of denim yarn has dropped slightly recently. The price of 10-inch OE pure cotton denim yarn is 14,000 yuan/ton. Affected by the epidemic in Guangdong, the industrial chain The downstream connection is not smooth. At the same time, market transactions are now dull. Overall, the opening rate has dropped slightly, the order volume has remained for one month, and the profit margin has declined. As the epidemic has been significantly controlled and companies have maintained normal startup levels, it is expected that a wave of production peaks will usher in July, and entrepreneurs are optimistic.
Lanxi gray cloth: Entering the traditional off-season, the supply of cotton yarn is relatively abundant, the yarn price is basically stable, the equipment is running normally, the shipment speed of gray cloth is not fast, the inventory has increased, and the downstream orders are the same as the same period in previous years. Quite, but basically no profit. It may be difficult to see market conditions in June, so we hope for future markets in mid-to-late July.
Jiangsu yarn-dyed fabrics: The overall yarn-dyed fabric market is weak. As the traditional off-season continues to deepen, corporate orders are obviously insufficient, the operating rate has dropped compared with the previous period, and sales have slowed down. Product inventories increased slightly. Upstream yarn prices are still strong, and some prices have been slightly increased. Prices of yarn-dyed products have remained stable in the short term, and corporate profits are under pressure. As the foreign epidemic continues to spread, export orders have not improved significantly. As the off-season atmosphere becomes stronger, many companies are cautious about the market outlook.
Hubei pure cotton cloth: At present, the overall market is still relatively light, with strong wait-and-see mood in the downstream, so orders are placed cautiously. In previous years, thick and thick varieties have become popular at this time, but this year it has been slow and there are not many orders for thick and thick varieties. Cotton prices have been ups and downs this year, and all links in the industry chain are keeping low inventories to avoid risks. Downstream companies are afraid to place orders, and textile companies are also worried about taking orders. Most of the current orders are small and short-term orders, and it is expected that “short-term, flat and fast” production and sales will continue to be maintained in the future.
Raw material procurement remains as usual
The Big Four Reasons restricting weaving from starting large-scale replenishment
For a long time, the price of raw materials has been directly related to the cost of gray fabrics, which is an issue of great concern to weaving enterprises.
Every time the price of raw materials fluctuates, weaving companies have to think about whether to stock up on raw materials, because maybe a single operation of raw materials can bring tens of thousands to several tens of thousands to the company. Changes in profits ranging from one million yuan.
In the past few years, due to the price increase of polyester yarn after the beginning of the new year, weaving companies gradually developed the habit of stocking up raw materials before the festival. However, after March this year, polyester yarn Prices fluctuated sharply, the market lost its direction for a while, and weaving companies were less concerned about buying raw materials. Even with the sharp rise in crude oil, polyester production and sales only exceeded 100 per day, and then quickly dropped to 30-40%. For weaving companies, the company’s current raw material inventory is sufficient. Those that can start production just need to purchase and use as they please. Those that cannot start production will directly stop production and do not need to use raw materials. The current rise and fall of polyester yarns seems to have no impact on them. .
According to the editor’s understanding, the following four factors have recently significantly restricted the launch of large-scale replenishment of corporate procurement:
1 It is the epidemic and power rationing (peak-shifting power consumption) that have continued to increase their impact on textile and garment enterprises in coastal areas such as Guangdong, Zhejiang, and Jiangsu. In addition to the epidemic prevention and control in most areas of Guangdong, which has had a greater impact on various textile markets, weaving and clothing companies, the recent high temperature weather has caused a significant increase in the power load in some coastal areas, causing off-peak power consumption or large-scale power rationing to come early; The restrictions on the production and sales of textile and clothing enterprises have increased;
Secondly, except for a few enterprises above designated size with strong bargaining power and stable orders, most manufacturers’ orders lack sustainability. Henan Some yarn mills in , Hebei, Shandong and other places have adopted measures such as production reduction and production restriction to achieve the purpose of “double reduction” of raw materials and finished products. Enterprises report that the return orders from India, Pakistan, and Bangladesh are mainly for mid- to low-end products with profit margins of about 10%, and enterprises with weak bargaining power are under pressure to digest;
The third is textiles Corporate cash flow is generally tight, and actual profits are lower than those estimated by some institutions. Judging from the survey, liquidity was looser than expected in May, largely due to the slow issuance of local government bonds. As the central bank emphasized policy stability, although the probability of tightening in June is not high, the central bank continued to renew MLF in equal amounts at par ( Medium-term credit facilities), sending a signal of tight capital balance, and the liquidity gap is not yet obvious;
Fourthly, the sharp fluctuations in the RMB exchange rate, the surge in shipping freight, and the shortage of containers have also restricted the Textile enterprises replenish their inventories. Recently, the pressure on order-taking and delivery from consumer terminals such as textile and garment enterprises has gradually been transferred to the midstream and upstream. The “buyer’s market” trend has slowly formed. Textile factories have become cautious in raw material inventory and order-taking, and large-scale purchases have been postponed.
Weaving companies still need to wait if they want to receive a large number of orders again
For current textile enterprisesHe said that orders are definitely the primary issue to pay attention to. Orders represent demand, it means that inventory will no longer accumulate, and it means that enterprises can continue to produce and operate normally. As for whether gray fabric orders in June and July can get out of the off-season ahead of schedule, small and medium-sized enterprises are generally skeptical and cautious. This can be briefly summarized as follows:
First, the epidemic situation in Southeast Asian countries is gradually under control. , cotton textile and clothing orders from Europe, the United States, Japan and other countries will flow back to India, Bangladesh, Pakistan and other countries;
Second, the RMB exchange rate fluctuates widely, and cotton textile and clothing companies lock in foreign exchange , there is greater pressure to regulate risks;
Third, the retaliatory rebound in textile and clothing consumption triggered by the epidemic in Europe and the United States and other countries gradually disappeared, and the market returned to rationality;
Fourthly, the rise in bulk commodities, skyrocketing sea freight, and shortage of containers have caused textile and garment enterprises with meager profits to become more cautious in accepting orders;
Five It is more difficult to improve Sino-US and Sino-European relations in the short term, which may further restrict and suppress textile and clothing companies from accepting orders and delivering goods.
For weaving companies, it will take some time to receive a large number of orders again! </p