Who caused the loss of corporate orders?
However, in the face of the fierce demand for raw materials and dyeing fees, textile companies are still caught off guard. Some companies even stated that the sharp increase in raw materials has become the main reason for the loss of corporate orders.
The skyrocketing raw materials inhibit the continued recovery of demand
Textile companies are going through the painful period of orders
“We haven’t had many orders recently and can only do it in March. We were busy when we first started because of the orders before the launch. In fact, the overall order volume in March was not as much as in February. .” said Mr. Feng, who specializes in polyester fabrics.
“Now the factory is making pongee and polyester taffeta, and the orders are pretty good. They are all orders from old customers, which is a little less than when we first started.” A manager Mr. Jin from Polyester Taffeta and Chunya Fang said.
A textile industry person pointed out that with the skyrocketing prices of raw materials and fabrics, textile and clothing exports are in a dilemma. At present, most foreign brands and retailers do not accept the increase in quotations from textile and garment enterprises and foreign trade companies. The increase in raw materials and fabrics is difficult to pass on to end orders. The affordability of export-oriented enterprises is relatively limited, so they either “abandon orders” or absorb the increase alone. No matter which choice is made, it will be very painful for the production company.
The skyrocketing quotations for raw materials, yarns, fabrics, etc. have inhibited the continued recovery of foreign trade demand to a certain extent. For example, many people in the textile industry said that customers would not accept the quotations based on the latest cost verification; on the other hand, traders complained that it was difficult to find processing companies with good supply quality and cheap prices. “Difficult to ship” has become the norm, so many export orders with low quotations and low profits have been abandoned.
Consumption collapses, raw materials plummet
Downstream procurement suspended
Yarn “Liquidation”? Traders sell goods?
We learned from the Foshan weaving market that after the craziness at the beginning of the year, it has entered a cooling-off period. Since the factory still has some follow-up orders, the quotation is still relatively strong, and only a few yarn mills have a small amount. Lower the offer price. Orders from spinning mills were high in mid-April, and a small number of spinning mills have already received orders for May and June. There has been no overstocking yet, but subsequent new orders are obviously insufficient. Some mills regret closing orders at the beginning of the year or only taking orders in recent months. Order.
Some traders have begun to loosen their quotations slightly, cutting prices by hundreds of yuan for shipments. Due to the large volume of shipments in the Foshan market, some traders from other places have recently come to Foshan to sell goods, resulting in chaotic market prices. , downstream customers have a strong wait-and-see sentiment.
1. Low downstream profits
The price of downstream cloth has dropped slightly from a week ago. The current operating rate of cloth factories in Foshan is still relatively high. However, due to insufficient follow-up orders and low-priced cotton yarn raw materials are gradually running out, the operating rate may gradually decrease in the future. Both the weaving and garment-making processes require a large amount of labor. Labor costs and raw material costs have continued to rise this year. It is reported that the comprehensive costs of garment factories have increased by about 30%. However, downstream demand has not really returned to pre-epidemic levels, resulting in continuous profits. Due to the squeeze, most fabric factories currently only have a few profit points, and they generally find it difficult to accept high-priced yarns.
2. “Sky-high” spandex
This year’s “good start” is that although the prices of all spinning raw materials are rising, spandex must be the first to rise. From more than 30,000 yuan in October last year, it rose to a peak of 90,000 yuan/ton. Mainly because spandex is a small variety, easy to handle, and its suppliers are relatively concentrated. At the same time, it is irreplaceable in applications such as core-spun yarn. However, due to the rapid rise, many subsequent orders have significantly reduced or eliminated the amount of spandex. Some traders predict that spandex prices may “go back and forth from where they are.”
3. Has the yarn “exploded”?
It is reported that the current storage capacity in Foshan is indeed full. There are approximately more than 100,000 tons of yarn in Foshan, and the port inventory of imported yarn is also full. The current yarn inventory is indeed at a relatively high level, but part of the reason is that cloth factories are now slow to pick up goods. In fact, a lot of yarn has been sold, but cloth factories can pick it up as needed and have not had time to pick it up. Coupled with recent environmental protection and fire protection restrictions, a lot of yarn cannot be placed in factories and can only be placed in warehouses. If the fabric factory orders and picks up the goods in the future, the current yarn inventory can also be released normally. But if the subsequent orders are always relatively light, it may really “explode”.
When will the big market start after the big drop?
The early stage is still��Pending orders may reverse in late March. After the craziness of the first two months, the market has gradually calmed down. The orders that were still pending in the early stage may face a clear break in the market in late March.
1. The downstream process from boycott to acceptance is coming
First of all, the current situation of weaving enterprises in the recent Most of the stock of low-priced raw materials has been consumed. If the same batch of cloth is produced with low-priced raw materials, customers can often negotiate a lower price than if produced with high-priced raw materials. With the growth of the gray cloth market after the Spring Festival, During the hot season, the original low-priced fabrics in stock on the market were snapped up in large quantities, and fabric merchants and traders also had sufficient gray fabrics on hand. Therefore, the interest in high-priced gray fabrics in the previous stage naturally decreased. Price increases can solve the problem of rising fabric costs, but they cannot solve the problem of downstream sales. After the New Year, the entire market is looking for last year’s inventory of low-priced gray fabrics, but this type of gray fabrics will be exhausted one day, and high-priced gray fabrics will always enter the market. At present, the market has been stable for more than half a month, and the downstream industry has gone from boycotting to accepting. The process is coming.
2. The probability of raw material prices going sideways is still high
After March, the rise in international oil prices paused, causing polyester raw materials such as ethylene glycol and PTA to rise and fall. After entering the middle of the year, polyester filament prices began to become unstable, and confidence in the continued rise in raw material prices was affected. There is also a risk that gray fabric prices will fall back in the future. However, based on the current raw material prices, the cost support of polyester raw materials is relatively obvious. The price of polyester filament will not fall significantly. After a slight decline, the probability of long-term sideways trading in the future is still relatively high.
3. There are signs on the printing and dyeing side, and we are still looking forward to the peak season.
At present, the printing and dyeing market in Jiangsu and Zhejiang has reappeared It was a hot scene. It is understood that the card opening process at the dyeing factory has been suspended, and the card opening queue has been waiting for more than a week. “We have recently done some small orders at the dyeing factory. The quantity is not very large, only a few kilometers, but it has been pressed for a week, and we still have to wait for a few more days. The weather is still uncertain. Moreover, the factory has stopped issuing cards, and subsequent orders entering the warehouse will have to wait endlessly,” said a textile company employee. “The factory has been very busy recently, although the amount of warehouse entry has dropped a bit. A week ago, there were 700,000 meters per day, and now there are 600,000 meters, but the dyeing factory is already very crowded, and the production queue is obvious.” A dyeing factory The person in charge introduced.
It is not advisable to blindly chase the rise and kill the fall
Waiting for the textile industry Spring
March and April are the traditional peak seasons for textile companies, known as the “Gold, Three, Silver and Four”. Although at this stage, with the stabilization of raw material prices, the market has experienced a short-term lag. However, in the face of the next market situation, textile people are still confident.
Manager Wang of the four-sided bomb manufacturer: Foreign trade orders will improve compared with last year. Due to the impact of the epidemic in 2020, rising sea freight and other factors, foreign trade orders have decreased, and foreign garment manufacturers and large merchants have As stocks at Chao Walmart and other stores decrease, orders will increase this year, but it still depends on the subsequent rise in raw materials and changes in the U.S. dollar exchange rate. Weaving boss Mr. Wu: The current price increase has been digested, fabric prices will gradually stabilize, and the market should become popular again.
How to interpret the market?
Although it has not been long since the beginning of this year, everyone has already experienced ups and downs, great joys and great sorrows. Because previous expectations were too full, market confidence has been severely frustrated at present. At present, with domestic seasonal orders being placed one after another, the overall market prosperity has picked up. Although external orders are still in a stalemate due to price reasons, considering the seasonal reasons of orders and the generally optimistic outlook of downstream weaving companies, orders are expected to It will be released gradually around April.
But in previous years, the off-season would be after the Qingming Festival. This year’s off-season in the weaving market seems to have come early. Everyone does not dare to have high hopes for the next two or three months, and believes that There is the possibility of a deep correction. But in the long run, as the epidemic and the economy improve, consumption will gradually continue to improve, and the market may be “short-term and long-term.” At present, the price of upstream textile raw materials is rising rapidly, and the price of gray fabrics cannot keep up for the time being. The price of gray fabrics will be able to follow it in the future. However, some knitting companies are reluctant to sell gray fabrics, and the wait-and-see sentiment is still strong. Most of the raw materials in the hands of downstream users are around 30-40 days old, and they are less interested in following the increase in the short term. They will mainly consume the inventory at hand first. The downstream users have expectations for the correction of raw materials. However, as the raw materials in the hands of downstream users are gradually consumed, production and sales will decline. It will gradually improve, and demand for replenishing positions at low levels is still expected to be strong. </p
