A notice of a four-month shutdown of a garment factory went viral on WeChat Moments: Because the customer has suspended all orders from the company, the entire company will be suspended from April 1, and the shutdown is estimated to last until July 31!
Seeing this news, textile people expressed great panic! As early as December last year, a textile factory issued a holiday notice for three months. In terms of holiday time, this four-month holiday can truly be called the longest. It’s vacation!
As the foreign epidemic continues to ferment, WHO statistics show that as of 18:00 Central European Time on March 27 (Beijing As of 1:00 a.m. on March 28, 512,701 cases of COVID-19 have been confirmed worldwide, with 23,495 deaths. The number of confirmed cases worldwide continues to rise. Many countries have adopted emergency measures such as city closures, country closures, and work suspensions to deal with the spread of the epidemic. This has also led to a decline in the textile industry. Companies continue to receive notices from customers about order cancellations and order suspensions. Many companies engaged in foreign trade said: They were looking forward to resuming work some time ago, but they have only resumed work for less than a month, and they are about to go on holiday…
Orders exported to Southeast Asian countries have also been suspended, and cancellations and suspensions of orders are common!
Nowadays, the cancellation or suspension of foreign trade orders is no longer a matter of one or two companies, but has become common. The person in charge of a foreign trade company said: “When we heard a few days ago that many orders from Europe and the United States were cancelled, we had not received any. Although we were a little panicked, we were still lucky. Our company did not involve customers’ garment factories in Europe and the United States. They are also in Southeast Asian countries, but at noon today, we received news that two customers were suspending dyeing! 40,000 meters of oblique peach and 50,000 meters of four-sided bombs were all suspended! The company will not have any orders to make next.”
Coincidentally, another salesperson also revealed: “Because we are afraid that the order will be canceled halfway, now we have reported delivery The period is shorter than before, and customers don’t dare to place more orders, which only cover a few kilometers. They are also afraid that they will encounter force majeure and have to cancel the order.”
“ We are working day and night to catch up on the orders that have not been canceled yet. The two workers who used to make the orders were fired by the boss because they did not want to work overtime and they did not do the job well. Now it is us who follow the orders and the salespeople go to work in person. Volume, the boss has also become a follower, and has been watching the dyeing process in the dyeing factory, hoping to deliver the goods before the customer stops it!”
Currently, the epicenter of the COVID-19 epidemic is still in Europe and the United States. Therefore, many companies that did not do orders from Europe and the United States were relatively calm before and believed that the overall problem was not big. However, as the epidemic deepened, orders from Southeast Asian countries began to be suspended. Although the epidemic in Southeast Asian countries is not particularly serious now, we have many trades in Jiangsu and Zhejiang. The orders are all exported to garment processing factories in Southeast Asia, but the final export destinations are European and American countries where the epidemic is severe.
There is another situation. Italy, where the epidemic is most serious, is the textile center of Europe and a country of design. The annual Milan Fashion Show is a fashion benchmark for the clothing industry. In addition to being exported directly to Italy, many fabrics are also purchased through other countries, and finally go to Italy for clothing design and then sold to other countries. Without the Italian link, there is no need to purchase fabrics.
Crude oil plummeted again, and polyester yarn fell by more than 800 yuan in a week. The cloth boss said: If the cloth cannot be sold, it is better to stop production!
On Friday, relevant sources in Russia reported that Russia is in contact with Saudi Arabia and some other countries and is expected to further negotiate on production cuts. However, Saudi Arabia quickly denied the news. The international crude oil market fell in response, with WTI crude oil falling 7% to the $21 mark; Brent crude oil also fell more than 6% to $24/barrel.
Due to the decline in crude oil, it is also difficult for PTA and ethylene glycol to rise, which has led to polyester filament also falling deeply. On the one hand This is due to insufficient upstream support and too high inventory. On the other hand, due to the lack of downstream orders, weaving manufacturers are not motivated to purchase. As of Friday, the quotations of mainstream manufacturers of POY 75D/36F were around 6100-6200 yuan/ton, while the quotations of FDY 50D/24F products fell to around 7300-7400 yuan/ton.
For weaving companies, the inventory of raw materials will be more or less limited, which means that the raw materials currently used in production are all the raw materials that were previously stored. . Therefore, on the surface, when polyester prices have dropped, factories will spend less on raw materials. This may seem like good news, but it is not. Plus recently orderedDue to the lack of fabrics, weaving manufacturers do not have a strong voice, and the price of cloth has also fallen with the decline of raw materials. Buying raw materials is like trading in stocks. I thought the raw materials had hit the bottom, and many manufacturers took the opportunity to buy the bottom. But the reality is that there is no bottom, only lower. No one can accurately judge where the bottom is. Now we can only watch the raw materials bought at high prices produce low-priced cloth.
The owner of more than 100 water-jet looms said: “Since March, our gray fabrics have dropped by 2 cents! Next, we are planning to shut down some machines, and the goods will be used as inventory after production. It’s better to take the initiative to reduce production.”
“Customers have been lowering prices recently when purchasing goods. Last week, they dropped 1 cent, and this week it dropped another 1 cent. My heart is bleeding. The price increase at the beginning of the year One wave is completely flat, or even lower, and there will be no orders next. We are prepared to reduce production. If there are no orders for a long time, we will consider taking a holiday. There are too many inventories and occupy working capital. We will not sell goods unless it is a last resort. It disrupts the market price, and secondly, we are not willing to do loss-making business.” said the boss Wang, who owns more than 400 machines.
Editor’s Note
The current overseas epidemic continues to escalate, affecting the order acceptance of weavers and traders. A cloth boss who has been deeply involved in the textile industry for more than 20 years said: “The most important thing now is not to make profits, but to ensure that we can survive during the epidemic. The first thing is to do a good risk assessment and accept orders. We must control the risks and do a reasonable job.” The quotation ensures the cash flow of the company, and I would rather not do a loss-making transaction.”
Nowadays, textile people are generally feeling sad, but the editor believes that this is only temporary. Now is a challenge, but it is also an opportunity. Our country With a complete industrial chain and diligent textile workers, low prices, high quality, and fast shipments are the advantages of my country’s textile exports. I believe that after the epidemic, my country’s foreign trade exports will clear up! </p
