The Spring Festival is getting closer and closer, and most textile companies in the market have already taken holidays. Looking at the past 2019 and the still grim situation in 2020, it can be said to be a mixed blessing.
If you don’t lose money, you will make money! The profits of the textile market have shrunk sharply
How to describe the textile market in 2019? Most textile people will say, “The peak season is not prosperous, the off-season is very weak, and business is not easy to do!” Due to the market situation, Poor performance, the industrial chain’s own overcapacity dilemma is difficult to solve, and the industry’s own profits are getting lower and lower. Compared with the highest point last year, profits have been reduced by more than half!
Take the most common water-jet loom weaving the most common polyester taffeta as an example: In 2018, it could earn 160 yuan a day, and 100 looms A small manufacturer can earn 16,000 yuan in one day, and more than 5.8 million yuan in profit in a year, just make money! In 2019, the machine rate of polyester taffeta has dropped to 20-30 yuan or even lower, which is a guarantee of capital preservation!
In addition to the lack of bright spots in the market itself, the comprehensive costs of manufacturers have become higher and higher in 19 years. In an era of soaring commodity prices, expenses such as labor, water, electricity, and rent are also rising. “This year the rent of our factory has risen to 300 yuan/square meter. This has been rising for two consecutive years!” said Mr. , I’m already satisfied!”
“The overall business is so-so.” said a boss who has been in the textile business for more than 20 years. In 2019, both the raw material market and the fabric market have experienced deep declines. Some chemical fiber fabrics have fallen by nearly 5 cents/meter per month, and some have been selling at low prices.
There are actually many reasons for the unsatisfactory market conditions in 2019, such as production capacity, external environment, policies, etc. Among them, the vigorous expansion of peripheral production capacity has caused overcapacity in the market and has become an “important straw” that overwhelms the market this year!
Overcapacity is more than just talk! The output of gray fabrics has increased by nearly 20% year-on-year
Since this year, “overcapacity” has become an indelible pain in everyone’s heart. Many textile bosses who have opened factories in the periphery are guarding a large amount of inventory. I have a terrible headache.
In fact, as early as 2 years ago, going to the Midwest to buy land and set up factories was a new “Garden of Eden” for textile bosses pursuing wealth. In the years of 2017 and 2018, when “every day makes money”, as Jiangsu and Zhejiang eliminated water-jet loom production capacity, in order to meet production needs, weaving companies began to move to peripheral areas. Companies in southern Jiangsu moved to northern Jiangsu, and companies in Zhejiang and Shanghai Enterprises are moving to Hunan, Hubei, Jiangxi and other places.
In an era when environmental protection is prevalent, many textile factories that have been liquidated have begun to relocate. To the central, western and inland regions, and in accordance with local investment requirements, hundreds of hundreds of new products were launched, resulting in a blowout of the originally shrinking production capacity a year later.
According to estimates by many industry insiders, the current production capacity of water-jet looms in Anhui Province is close to 40,000 units; the production capacity of water-jet looms in Hubei Province is It has reached about 23,000 units, and Northern Jiangsu is the “first stop” for many bosses to transfer, with greater output.
If the newly added loom production capacity is added up, it has already exceeded 200,000 units, exceeding the number eliminated in Wujiang, Jiaxing, Huzhou and other places. The production capacity gap originally caused by loom renovation has been filled, and there is even a lot of surplus.
Take the textile industry in Anhui Province as an example. In 2018, yarn output was 1.276 million tons, a year-on-year increase of 15.6%; cloth output was 970 million meters, a year-on-year increase of 19.4%; clothing output was 940 million pieces , a year-on-year increase of 1.4%; chemical fiber output was 396,000 tons, a year-on-year increase of 10.5%. It can be seen that the entire industrial chain is expanding, especially the output of raw materials and gray fabrics, with growth rates exceeding 10%.
▲ (Output of main products in Anhui textile industry from 2011 to 2018)
The sharp rise in production has laid the groundwork for overcapacity! On the one hand, a large number of gray fabrics have been put into the market; on the other hand, the terminal digestion speed has slowed down significantly. “In the past two months, we have maintained an operating rate of about 50%, just to destock well before the year. We feel that the pressure will be relatively high in the first half of next year.” said Mr. Chen, who runs a factory in northern Jiangsu.
The textile boss who was originally prepared to go out and do something big is now feeling even more pressure. In December 2019, many textile bosses who built factories in other places were already preparing for holidays. Today’s sharp increase in gray fabric production has laid the “foreshadowing” for the market in 2020! </p
