Recently, according to feedback from cotton textile companies in Jiangsu, Henan, Hebei and other places, inquiries and shipments of fabrics and gray fabrics have softened since mid-January, and some spinning mills, weaving and clothing companies will enter holiday shutdowns around the end of January. rhythm, consumer terminals began to waver and gradually passed upstream. Although the current product quotations of raw material factories and various light textile markets in coastal areas remain stable, market sentiment has become differentiated. It has adjusted from a “seller’s market” to a “buyer’s market” before mid-January. Fabric factories and middlemen who are willing to stock before the Spring Festival Continuously decreasing.
A medium-sized textile company in Zhengzhou, Henan Province said that although the transaction of gray cloth and cotton yarn has slowed down significantly compared with previous weeks, the ex-factory price will not be lowered before the Spring Festival: 1 The reason is that the stock of gauze is low this year (only 7-10 days), which does not occupy a large amount of working capital. Second, the current cost of installing the machine and stocking gauze is relatively high, and there is not much profit margin. Naturally, there is little willingness to lower prices. Third, we continue to be optimistic about the textile market in the first half of 2021. Repeated adjustments to quotations are unacceptable to customers, which is not conducive to post-holiday sales. Fourth, the gauze stocks of traders in various light textile markets in Guangdong, Jiangsu, Zhejiang, Shandong and other places are relatively low this year. As long as the domestic epidemic is effectively prevented and controlled and Sino-US relations do not deteriorate, intermediate links are expected to restock a large amount of stocks after the year, which will supplement the increase in gauze prices. Play the role of “fueling the flames”.
Amid the bullish sentiment on textile raw materials after the Spring Festival, some large textile companies have a somewhat cautious and conservative view, believing that the market has not returned to normal and the sustainability of the return of foreign trade orders remains to be seen. The additional tariffs imposed by the United States on Chinese textile and clothing imports have not been cancelled, and the trend of “de-Sinicization” of US textile and clothing brands and retailers will be difficult to reverse in the short term. The broad ban imposed by the United States on Xinjiang cotton products will have a short-term impact on my country’s textile and clothing exports. The Biden administration has launched a huge fiscal stimulus plan, and the trend of the RMB exchange rate is very important. Once it enters the appreciation channel again, it will be more difficult for textile and clothing companies to receive orders.
Isolation of workers returning to the factory after the holidays is another big problem
The recent situation of the new crown epidemic has become increasingly complex. The epidemic spread from multiple points has sounded the alarm to all walks of life, which is a good atmosphere for the current situation. The operations of textile companies have also been put to the test, and all regions are working hard to ensure local safety with strong vigilance and strict prevention and control measures.
Zhangjiagang, Yancheng, and Nantong in Jiangsu Province are clustered with small and medium-sized enterprises focusing on spinning, weaving, bedding, and cotton-related toy products. The number of textile workers is large and they come from a wide range of areas. The Spring Festival is approaching, and although local governments and companies have taken various measures to control movement, they still cannot implement a “no movement”. Judging from the situation, some employees still plan to return home before the Spring Festival. The flow of employees during the holidays will have a certain impact on business operations:
First, if employees come from medium- and high-risk areas when they return to work, the isolation observation for more than two weeks will inevitably reduce the company’s operating rate and make it more difficult to control the epidemic.
Second, the local epidemics and foreign epidemics scattered at many points across the country have restricted the production and marketing decisions of enterprise operators. Once an epidemic occurs locally or within the company, For small and medium-sized textile enterprises with small scale and poor risk resistance, the pressure is huge. In this regard, for the sake of safety, some companies have minimized recent orders, raw material inventory and product retention, while some small and micro enterprises would rather do processing and take small orders, and try to avoid taking large or long orders.
Third, raw material prices are facing challenges, and companies’ ability to cope with risk control costs will be weakened.
According to reports from enterprises, in the past three or four months, the production, supply and marketing situation of both polyester and cotton yarn has been good due to the support of the market outlook. Once the impact of the epidemic changes, especially in the light textile industry clusters in Jiangsu, Zhejiang and Shanghai, it is very difficult to control. If an epidemic occurs and requires isolation for half a month or even longer, it will inevitably affect the production, sales and circulation of textiles.
Therefore, to objectively analyze the textile market under the multi-point epidemic situation, no matter where you are in the supply and demand market, you must assess the situation and make scientific and pragmatic judgments and decisions. </p
