In the first week of July, the Siyang County Ring Taihu Shade Cloth Home Textile Chamber of Commerce issued a notice to hundreds of blackout cloth members saying that recently, stimulated by the rebound in international crude oil prices, the price of chemical fiber raw materials has increased, and the costs of downstream weaving companies have continued to rise, and profits have Being squeezed again and again. To this end, it is recommended that all members increase the price of the original products by 0.5 to 1 yuan/meter according to different weights. The increase is not profit but cost.
This type of notice also appeared when the raw material prices increased significantly after the Spring Festival this year. Recently, from late June to early July, in less than half a month, the price of textile raw materials has been raised no less than 6 times. The relevant person in charge of the chemical fiber sales department of Hengli Group, China’s leading textile manufacturing enterprise, told reporters that since July, the three products of DTY (drawn textured yarn), POY (pre-oriented yarn) and FDY (fully drawn yarn) have all increased by 500. Yuan~800 per ton. Among them, driven by the domestic demand market, DTY and POY have seen the strongest growth, with a cumulative increase of 3,000 yuan per ton in the first half of this year.
The person in charge said that the main reasons for the price increase are the rising international oil prices and the Impact on upstream costs. FDY products, which are mainly supplied to the foreign trade market, have been affected by repeated overseas epidemics, tight supply of containers, and sharp increases in freight charges. The overall growth rate is not as good as the first two.
Under such a rising trend, textile companies that had been watching and waiting in the early stage began to waver. After all, the price of raw materials is rising in the off-season, and it will definitely rise in the peak season. As a result, some textiles began to decisively “buy up”. A person in charge of a weaving factory said that they have recently started to stock up on raw materials and bought a month’s supply. The purchase volume has increased and should increase in the future. Raw materials are increasing in the off-season now, and they will definitely increase in the peak season. In particular, the raw material of spandex is experiencing the craziest growth. It is understood that since June, textile companies in Jiangsu and Zhejiang have used a large amount of funds to purchase spandex and hoard it.
The price increase of raw materials has become a hot topic in textile industry in the past month. Affected by this, some weaving companies have begun to raise prices for gray fabrics again!
However, as everyone knows, the price increase of raw materials is difficult to transmit to the price of fabrics. . Meng Zhuo, manager of Anhui Garment Import and Export Co., Ltd., told reporters that in addition to negotiating price increases with customers, they may not be able to do so, because some of the orders returned to China were originally produced by Chinese companies in Southeast Asian factories, but Because of the epidemic, I had to bring it back to China. Domestic production costs are definitely higher than those of these factories in Myanmar. Coupled with international freight and other factors, the increased costs of these products will inevitably further erode the company’s profits and even costs.
Meng Zhuo also said that due to the long international shipping cycle, the orders for this autumn and winter must be completed before July, and they were accepted in October last year. For orders that need to be received now, not only must the exchange lock be taken into consideration, but the increase in shipping charges must also be taken into consideration, and how the increase should be shared is stipulated in the contract.
According to Meng Zhuo’s observation, this year’s production is mainly due to the tight production of garment factories, and “the list cannot be completed.” The fabric factory belongs to the off-season, and even in the peak season it is not as good as before. The China Chamber of Commerce for Import and Export of Textiles disclosed on July 13 that China’s textile and apparel exports in the first half of the year increased by about 3% and 12% year-on-year respectively in RMB and US dollars, and also maintained rapid growth compared with the same period in 2019. Among them, textiles declined year-on-year due to the impact of masks, while clothing grew rapidly driven by the rebound in external demand. In RMB terms, from January to June 2021, the cumulative exports of textiles and clothing were 908.87 billion yuan, a year-on-year increase of 3.27%, of which textile exports were 444.85 billion yuan, a year-on-year decrease of 14.63%, and clothing exports were 464.02 billion yuan, a year-on-year increase of 29.25%.
The continuous rise in raw material prices is not a sign of the recovery and prosperity of the textile industry. After all, many other links in the textile industry chain have to deal with the worries of reduced orders and rising costs. From the perspective of profit level, the current profit of gray fabrics is low. The main problem is the lack of orders and high financial pressure. Especially in recent days, with the increase in raw materials, the profits of gray fabrics have also dropped, and some specifications of gray fabrics have even suffered losses.
The person in charge of a four-way stretch weaving manufacturer said: “The price of spandex has increased by 13,000 yuan so far. / ton, but currently the four-sided elastic fabrics in our factory have not increased at all, and some products with large quantities even have discounts. The price increase in the current market cannot rise at all. The quantity is there, but as soon as the price increases, all the customers leave. , there are many factories that do not increase prices, and you can buy it anywhere. According to the past, if the original price increased by 500 yuan/ton, the price of gray fabric would increase by 0.02 yuan/meter. Now you can only absorb this part of the cost yourself. So basically You can’t make money, so you lower the price and collect cash, just for the sake of capital turnover.”
There is no profit if there is no price increase, and there is no sales volume if the price is increased. This can only be enjoyed by some hot-selling products. Other ordinary fabrics have average sales regardless of price increase or not. These products only requireWhile the fabrics are being made, most of them end up being left in inventory. However, the gray fabrics in inventory cannot be paid for rent and workers can be paid, so many textile companies have begun to think of selling goods at low prices.
A person in charge of a textile factory said that the factory’s current operating rate is about 70%, and the inventory is still increasing. If the backlog continues, it can only be cashed out cheaply, and production will be reduced. Another person in charge also said that inventories are increasing, and production cuts and low-price sales in the later period will not be possible. </p
