2019 has been a painful year for the vast majority of textile workers, with lack of orders, low-price competition, and payment arrears all the time. Amid all kinds of regrets and helplessness, 2019 has finally come to an end, and the traditional Lunar New Year has also taken a step forward. Today’s textile market has begun to be enveloped in a holiday atmosphere, and the final finishing work of various types of years is being fully implemented. Fast-moving textile companies are also quietly starting preparations for next year’s orders.
The holiday time is clear, but the order is different
Through market visits, we found that the vast majority of gray fabric merchants and traders have announced the Spring Festival holiday time. And the holidays are mostly concentrated on January 10th and January 17th.
Through specific analysis, most of the companies that have a holiday around January 10 are traders, while most of the companies that have a holiday on January 17 are weaving companies. It is understandable that the holiday will be around January 10th, because there has been news in the market that dyeing factories will stop production before January 10th. It is very reasonable for ordinary traders to set the holiday time at this node. But what is puzzling is that the holiday time of the gray cloth factory is particularly late this year.
According to common sense, weaving companies will have a holiday before the dyeing factory stops production. After all, the gray fabric cannot flow downstream when the dyeing factory stops production. The holiday market of gray fabric factories is now about a week late. This abnormal behavior actually illustrates the situation that the inventory of weaving enterprises is too high and they need to extend working hours to digest the inventory.
According to the person in charge of a nylon textile factory, the nylon spinning market this year is not good, and they are deeply touched. When the inventory was at its highest in 2019, there were more than 20 million meters of gray fabric in the warehouse. Even now, there is still a large amount of inventory that needs to be digested. Since their gray fabric sales range is wide, not only in Jiangsu but also in Fujian, Zhejiang and other places, and the holidays in these areas are relatively late. In order to further clear their inventory, they can only postpone the holidays simultaneously. Their current holiday is on January 16th.
Inventory has always been a pain for weaving companies in 2019, especially for conventional fabrics. Even at the end of the year, this torture will still exist. Ordinary traders, on the other hand, do not have such troubles. They basically produce quantitatively according to customer needs, and there is no such thing as inventory.
Fabric price reduction to help inventory digestion
Everyone who does business knows the principle of “small profits but quick turnover”, and textile bosses are no exception. If the gray fabrics in the warehouse want to be turned into money, the only way is to sell them, and when there is a lack of orders and supply exceeds demand, the only way is to lower the price.
There are two situations in price reduction, one is passive and the other is active. What does passive price reduction mean? It is the decline in textile costs that has brought about price cuts on fabrics. For example, the price of raw materials that has a greater impact has continued to be low this year, and fabric prices have generally fallen by 20%-30%, which is also in line with the decline in raw material prices. The active price reduction is to exclude some external reasons, just because it hopes to promote sales through low prices.
For example, the 380T nylon spinning that has always been a hot seller last year was basically 4.6 yuan/meter. This year, the price of raw materials related to nylon spinning has dropped by about 30%. . Judging from the passive price reduction, the current price of 380T nylon spinning is reasonable at 3.3 yuan/meter. However, during the market visit, we found that there are very few fabric vendors who maintain this price, and they all actively offer profit margins of 0.1-0.2 yuan/meter on the basic price. Many gray fabric vendors are even selling at an invoice price of 3 yuan/meter.
Not only are they actively reducing prices, but many fabric manufacturers are even giving up on price increases that should be raised. Recently, raw material prices have experienced a rare sharp rebound. However, during interviews, we found that many textile workers in the market said that there were not many orders as the year was approaching, so it would be meaningless to increase prices, and they had no plans to increase prices.
Guarantee employee welfare and prepare for another fight in the coming year
2019 has come to an end, and 2020 It is still unknown whether the textile market will reverse in 2020 or continue to be depressed. But no matter what the market situation is, the efforts and preparations that need to be done are indispensable. Especially in 2019, the textile market has not been good throughout the year. Most companies have experienced a decline in profits. Now that the Spring Festival is approaching, employees are unstable and lack a sense of security about their year-end income and next year’s job opportunities.
To stabilize people’s hearts and accumulate strength for 2020, the first thing to do is to stabilize and increase employee income. During the visit, some company leaders reported that although the market is not good this year, in order to prevent workers’ income from falling sharply, the factory’s operating rate has not been easily lowered this year. In addition, most companies in the year-end benefits also said that even if they will not be increased, they will certainly not be reduced.
Retaining employees, especially old employees, is of great significance to the company’s production and operation in the coming year. Not only does it save the economic costs of re-hiring people, but it also reduces the time cost of adapting to a new job.
Many textile companies have encountered situations such as high inventories and falling prices in 2019. How to survive in a sluggish year, all textile companies are working hard to think of various ways. Now that 2019 has finally come out, the vast majority of textile companies are not overly pessimistic about 2020. They have improved employee benefits to reserve talents for next year, formulated work plans, and adjusted production directions to pave the way for breaking the deadlock next year… </p
