For textile companies in 2020, price reductions are nothing new, but price increases are relatively rare. At this time, what is the company’s reason for the increase in dyeing fees? Could it be that as the end of the year approaches, the fabric market is getting better again?
The price of natural gas has increased, and northern printing and dyeing companies have raised dyeing fees
Due to the increase in natural gas prices, production costs have increased significantly. Severe LNG gas shortages have occurred in North China, East China, South China, and Northwest China, and downstream transaction prices have soared in one month. Due to the rising cost of production materials, many factories have adjusted dyeing fees, mainly involving warp-knitted and weft-knitted fabrics.
On the other hand, in recent years, the printing and dyeing industry has launched the “coal-to-gas” transformation project of setting machines. In most areas, setting machines have realized natural gas production. After the “coal-to-gas” transformation, printing and dyeing enterprises have bid farewell to the heating of setting machines. Coal-fired boilers no longer use coal as fuel, but are replaced by clean energy such as natural gas, medium-pressure and medium-temperature steam, liquefied natural gas and biomass boilers. The “coal-to-gas” transformation project has led to a significant increase in the consumption of natural gas, medium-pressure and medium-temperature steam.
Data from the National Bureau of Statistics show that from January to October, the number of loss-making households among China’s 1,578 printing and dyeing enterprises above designated size was 528, with a loss rate of 33.46% , a year-on-year expansion of 12.19 percentage points, and the growth rate narrowed by 1.86 percentage points compared with the first three quarters; the total loss of loss-making enterprises was 2.001 billion yuan, a year-on-year increase of 49.54%.
“The overall situation of the textile market this year can be summarized as ‘the off-season is lengthened and the peak season is not prosperous’. Under such circumstances, business operations will inevitably be at a loss, so at this time they choose to increase the unit price of products to maintain themselves It’s understandable to survive. Moreover, the price increase this time is not large, it can only be regarded as a test of the market.” Analysts from the industry said. Others in the industry bluntly said that the price increase a year ago was a “routine operation” in the industry and a normal phenomenon.
The operating rate has declined, and the industry as a whole lacks motivation to increase prices
Of course, this increase in dyeing fees is only an isolated phenomenon, and most printing and dyeing companies are still Stand still. In fact, looking back on the past two years, starting from 2019, the dyeing fees of printing and dyeing factories have almost never been adjusted on a large scale and have been in a relatively stable state.
Some people in the industry have different views on the cost issue. “Apart from some production costs such as dyes and natural gas, under the same production conditions, the saturation of orders has a great impact on costs. During the peak season, as long as the output is large enough, even if some materials are wasted, production costs can be reduced . But in the off-season, customers will have stricter quality requirements, not only in terms of color, feel, width, weight, etc., but also if there are slight defects, they may be returned. During the off-season, the dyeing factory will repair and return the goods. The rate is usually higher than during the peak season.”
This year, testing data from relevant platforms show that the average operating rate of printing and dyeing enterprises in Wujiang District, Suzhou City, Jiangsu Province is only about 60%. In such a situation of long-term lack of orders, it is conceivable that printing and dyeing factories may increase their external quotations for dyeing fees, and some companies have even launched preferential policies.
Industry insiders said that in the situation of “more monks and less rice”, the competitive pressure of printing and dyeing enterprises is increasing. In order to retain customers, the only way is to squeeze profits.
“This year, the company’s development concept is to give priority to maintaining good customer relationships while striving to ensure product quality. Although production costs are now high , but if the dyeing fee is raised at this time, it is likely to cause fabric manufacturers to transfer orders to printing and dyeing factories with lower dyeing fees, which will cause us to lose customers and make the loss outweigh the gain.” A person in charge of an enterprise in Shantou, Guangdong express.
Hard to get off to a good start? Domestic demand is expected to continue to pick up
In 2020, the epidemic hit the textile market hard. Now, 2021 is coming, where will the printing and dyeing industry go?
In the view of some companies, it is unlikely that they will have a “good start” next year, and some small and medium-sized textile companies will even face the crisis of production reduction and shutdown again.
Recently, news that Zhejiang Province has implemented power and production restrictions due to environmental protection management can be seen everywhere in the circle of friends of textile practitioners. On December 15, Fujian Hongshan Thermal Power Co., Ltd. also issued the “Notice on the Time to Stop Gas Supply During the Spring Festival in 2021”, both of which will result in the inability to produce a large number of textile orders or delay in production and delivery.
However, the production of enterprises in Zhejiang and Fujian is restricted, which also means that there is a strong willingness to transfer such orders. At present, many printing and dyeing factories in the Jiangsu market have begun to see significant growth in their orders. “The incoming warehouse volume of our factory was only about 500,000 meters per day on Monday this week, which was completely insufficient to absorb the 700,000 meters of production capacity. But starting from the past few days, the incoming warehouse volume suddenly increased rapidly, reaching 1 million meters per day. . This volume has only appeared this year when work was resumed at the beginning of the year and there was a large backlog of orders.” said a person in charge of a dyeing factory in the region.
As for the market conditions in 2021, the heads of many textile companies expressed cautious optimism, “Now many countries have�Announcement of the vaccination plan, I hope the market will be able to recover. “The general direction is generally good, but there will be a large gap in the performance of various companies, and polarization may intensify.” ”
From a micro perspective, although the recent market does show signs of increasing orders, there is not much time left before the Spring Festival holiday, and it has indeed reached the stage where orders need to be placed in advance. In addition to the normal rush In addition to goods, the orders placed also include some stocking orders. Stocking orders may be canceled at any time, which completely depends on the traders’ whims. Once they are not optimistic about the market next year, it is logical that stocking orders will be stopped. In addition, there is also the risk that the order originally planned to be placed will be reduced in quantity due to the impact of the epidemic. This kind of thing has happened a lot this year.
The judgment from the China Printing and Dyeing Industry Association is that currently, The foreign epidemic continues to spread, and with the addition of unilateralism, trade protectionism and other factors, the foreign trade market of China’s printing and dyeing industry is still facing more uncertainties. The foreign trade pressure of the printing and dyeing industry is still difficult to be significantly relieved in a short period of time, and exports have returned to the epidemic level. It will still take a long time to reach the previous level.
Therefore, the recurrence of the epidemic may always have an impact on the textile market, and there may still be variables for the market next year. Therefore, we can only Focusing on the present, completing existing orders and ensuring smooth delivery are top priorities.</p
