Having lived in sunny spring for a long time, the cold wind in winter makes them feel particularly biting!
As the inventory problem escalates again, the price of raw materials has accelerated, and the price of gray fabrics has also been stagnant. Recently, some people have been asking whether the price is very low. Can they buy the bottom? Some people also pointed out that in the past, both raw materials and gray fabrics would rebound after reaching low levels, especially around the Spring Festival. Will it happen again this time? Some people will say that terminal consumption is too bad. When will it improve?
When will the “cold” prices end?
At present, the entire textile industry chain seems to have fallen into the abyss of “falling prices”, from polyester raw materials to spinning to gray fabrics, all the way to “falling”!
PTA: From 9,300 yuan/ton in September 2018, it has dropped to around 4,700 yuan/ton currently, a cut in the middle!
MEG: From 8,600 yuan/ton in 2018 to the current low of 4,500 yuan/ton, a drop of about 47%!
Polyester filament: Taking POY150D as an example, it fell from a high of 12,300 yuan/ton in September 2018 to 7,000 yuan/ton, a drop of 43%!
Gray fabric: Taking the conventional product 240T pongee as an example, this year it dropped from 2.40 yuan/meter to 1.70 yuan/meter, a drop of nearly 30 %.
Such a price trend has cast a layer of “ice” on the market entering the cold winter. When will the ice be broken? It has also become the biggest question in everyone’s mind. Some textile people said that this year’s market is difficult. The difficulty is that everyone overestimates the market’s endurance and underestimates the destructive power of production capacity. As a result, many products have fallen beyond recognition!
Many textile bosses said that the current products can really be said to be the lowest prices in history! When a textile boss joked to the editor: If I had money on hand, I would consider stocking up, because at this price, I won’t lose money!
But the key is, where is the money?
Many people may think that the textile industry is a low-barrier industry, so when the market is good, they will swarm in and spend money on machines; when the market is bad, Many people who have become monks on the way will also choose to change careers or develop across industries, resulting in a high-speed turnover of money on hand.
Nowadays, after more than half a year of “slow peak season and very weak off-season” textile market, many market participants feel that business is not easy to do. The reasons are nothing more than several aspects:
1. The traditional business model of the apparel industry has ended, and the apparel industry has also fallen into overcapacity. In the past era of shortage economy, any clothing produced could be sold, but now everyone has no shortage of clothing, only the clothing they like.
As a result, the clothing industry’s fabric procurement model has also changed. Orders of tens of thousands of meters in the past have begun to “disappear”. Conservative clothing purchasers tend to prefer small batches, multiple batches, and personalized products. Globalized products, traditional products are easily replaced by new products, so the demand for conventional fabrics has also begun to shrink;
2. Industry Its own profits are getting lower and lower, and comprehensive costs are getting higher and higher. In an era of skyrocketing 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. Xia, owner of a textile factory in Wujiang area.
In addition, environmental protection and safety supervision continue to be enforced with high pressure, and the costs incurred have also put some small and micro manufacturers under great pressure. Costs are rising, but the price of the product itself is falling instead of rising. Because the market supply and demand pattern continues to be imbalanced, prices have fallen to historical lows. For example, 300T pongee dropped from 2.40 yuan/meter at the beginning of the year to 1.70 yuan/meter, which is close to the cost price. It can be seen that many production-oriented companies can only maintain low-profit operations;
3. Brexit, U.S. tax hikes, Turkey’s near collapse, and constant impacts on the foreign trade market. This year, the global economy is under pressure and the market is relatively turbulent, which has a negative impact on my country’s foreign trade in textiles. Among them, the escalation of Sino-US trade friction has the most serious impact. Although the two countries are still actively negotiating, it has a substantial impact on the textile industry. Good signals did not appear.
“In previous years, orders from foreign customers would be placed one after another at this time. On the one hand, they are rushing to ship before the Spring Festival, and on the other hand, there are orders available after the Spring Festival. However, not to mention the shrinkage of orders this year, up to now Our orders after the Spring Festival are still not settled. After all, Sino-US trade has not been well resolved, and the market is still tight!” said Mr. Shen, the boss of a textile foreign trade company. Therefore, in this environment, many textile bosses do not dare to take long-term or large orders for fear of an unstable market.��Causing the remaining profits to be eroded.
After a long journey of exploration, where can we find “spring”?
At present, many textile and garment companies are choosing to transform and upgrade to enhance their brand image. “When things go up, there are risks, and when things go down, there are opportunities.” The market bottoming out and rebounding will never be absent, but the key is whether you can seize the time. At present, many traders that the editor has contacted will protect their customers more carefully than before. “In the past, when customers sent sample fabrics, we would look for similar ones in the market, but this year we will choose to make accurate samples. From gray fabrics, printing and dyeing to finishing, we control every aspect ourselves, just to make customers like our products at a glance. products.” Trader Mr. Wu said.
In this situation of declining demand, every link will become very important, and the market is still in a state of confusion. Judging from the current weaving market, spring and summer fabrics are being released one after another at the same pace as in the past, but the order volume and profit margins have shrunk significantly. Many market participants said that the market next year will not be easy either! A boss is quoted as saying: “If you look around, no matter which factory has low inventory, the industry’s prosperity will not recover quickly until this inventory is properly transferred to the downstream.”
In short, it will take time to break the ice. At present, companies still need to strictly control the inventory of finished products to maintain their financial advantages. They need to be more cautious when buying lows!
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