Under the urgent economic situation during the epidemic, how can the textile industry survive alone? As the saying goes, “food, clothing, housing and transportation are indispensable”. As necessities in life, from the epidemic in the Year of the Rat, to the disaster that made people hide in plain sight, they did not talk about the downgrade of consumption in the early days. Now, the street stall economy has become popular, but it has encountered the consequences of the second epidemic. turmoil.
The rapid rise and fall of raw materials has created a situation of low profits and even losses for enterprises
From the outbreak of the overseas epidemic in March to April when the United States took the lead in sending a signal to start the economy, The urgency for the return of foreign trade demand has not ceased. Textile companies have increased their shipments under the established conditions of double material increases, creating a trend that runs counter to each other.
There is no doubt that the support from the demand side is weak. One can imagine the difficulty of business operations. There are many companies that have holidays during the Qingming Festival, May Day, and Dragon Boat Festival. Even during other periods, some companies have reduced operations and reduced production, but this has not changed the imbalance between supply and demand.
Short-term holidays have become the norm, and the limited demand environment has made market competition more intense
Affected by the traditional off-season, let’s not talk about large and long-term orders for the time being. Bulk orders are also significantly less than usual. With the sharp drop in order volume, the limited demand environment has made market competition more intense. Although the price of raw materials has not been volatile recently, high inventory is difficult to realize and digest. In order to stimulate the enthusiasm of old customers to purchase goods, companies in some regions have increased rebate policies, and large customers can negotiate actual orders for goods. Some other companies have already fallen into a state of loss, even losing money every month. It is no longer realistic to continue to adjust the quotation, and they are forced to shut down and perform maintenance due to the situation.
According to corporate data monitoring, on the eve of the Dragon Boat Festival, the operating rate of looms in Jiangsu and Zhejiang showed a partial downward trend. Among them, the operating rate of Shengze water-jet looms was below 70%, and the operating rate of Changxing water-jet looms also remained at 70%. About 70%, Changshu warp knitting is around 70%, Haining warp knitting performs slightly better, maintaining an operating rate of 70-80%; Xiaoshao circular knitting performs relatively weakly, maintaining an operating rate of around 40%.
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 is also understood that some yarn companies have arranged arrangements for employees during festivals such as Qingming, May Day, and Dragon Boat Festival. Holidays generally last 5-10 days.
1. Nanyang, Henan: Sales are still sluggish and most textile companies have stopped working and are on holiday
On June 22, news from the Henan Monitoring Station of the National Cotton Market Monitoring System came from various textile companies in Nanyang City, Henan Province. From an operational point of view, the current sales of cotton yarn are still not optimistic. Except for a small amount of blended yarn and low-count yarn spinning enterprises that are producing well, the operating sales of pure cotton high-count yarn are still sluggish and the operating rate is low.
At present, local enterprises that produce high-count yarn are not operating well, and their operating rates are constantly decreasing. Some textile enterprises have to stop work and take holidays due to funding and sales problems. It is understood that corporate holidays range from ten days to a month. Most companies decide their holiday time based on customer orders.
2. Anhui: The market is in a downturn and holidays have become the norm
In June, the market has entered the off-season. At the same time, the global COVID-19 epidemic has not been completely controlled, and the willingness of downstream purchases has decreased. Cotton yarn The volume of goods shipped is small, resulting in increased inventory.
According to the Anhui Monitoring Station of the National Cotton Market Monitoring System, with the Dragon Boat Festival approaching, some small and medium-sized cotton spinning mills in Anhui Province will have a short holiday instead of the usual practice of not having a holiday during the Dragon Boat Festival in previous years. Faced with the sluggish textile market this year, it has become normal for some cotton spinning mills to choose to take short holidays during statutory holidays.
The market downturn is difficult to break, and the textile industry will still suffer from high inventory and low profits.
Taken together, the halo of the off-season is shrouded, and there is no favorable wind for the time being. The volatile trend of international crude oil coupled with the weakening fundamentals of the polyester sector may mean that cost support may not be worth mentioning given the sufficient supply and demand for raw materials. In addition, considering that under the interference of the epidemic, external support is still weak, the return of foreign orders has yet to be verified, domestic sales orders have decreased, and companies’ conservative operating methods have continued. It is expected that before demand fails to return, the market downturn will be difficult to break, and the textile industry will still suffer from high inventory and low profits. </p
