The textile market seems to be duller in late May! The negative impact of the Sino-US trade war on the market has been offset by the recent continued depreciation of the RMB. However, the market still feels “gloomy”. At present, all upstream, mid-stream and downstream links of the textile industry have shown certain performance Weak, many textile bosses are worried about what will happen in the coming days.
Recently, a cloth boss complained to the author: Raw materials have been falling recently, and customers are trying to lower prices with us. , they were already in a stalemate over the 2 cents, but each pair of finished pants they made was priced at a thousand yuan! Indeed, compared to the hundreds or even thousands of garments produced in recent years, the proportion of fabric price is very small. However, many buyers will still continue to lower prices. In fact, the profit margins of weaving companies are really running out now!
Raw materials are “Black May” and the industrial chain is intact Downtrend!
The plunge of PX can be said to be a precursor to the change in the entire polyester industry chain. Subsequently, the prices of upstream raw materials for PTA and MEG also continued to fall: on May 16th, As the repurchase efforts of PTA suppliers weakened, PTA spot experienced a cliff-like decline. PTA spot fell sharply, and ethylene glycol also fell below the 4300 line.
After the escalation of trade tensions between China and the United States, prices in the polyester industry have continued to decline, and the profits of some polyester products have been completely swallowed up. Affected by the weakness of upstream raw materials, polyester filament prices have also continued to fall, falling below the historical high since last year and hitting new lows recently. Other non-polyester chemical fiber raw materials, such as viscose staple fiber, nylon filament, etc., have been in a downward trend, and there are no signs of stopping the decline in the near future.
As can be seen from the above table, in the past half month, all types of bulk textile raw materials have shown varying degrees of decline. Among them, POY has the largest decline, with a decrease of nearly 10%. Spandex yarn has been a relatively stable product, with a decrease of nearly 10%. 2%. For weaving manufacturers, as a rule, the factory will keep 10-15 days of raw material inventory, which means that most of the raw materials used in production now are the raw materials before the price drop. Therefore, on the surface, the price of raw materials is falling, and the cost of raw materials in the market is loosening. It will bring benefits to enterprises, but from a practical point of view, there is a lag in the transmission of raw materials. In addition, in the current environment of shrinking demand, weaving mills do not have a strong voice. Therefore, the price of gray fabrics has also dropped along with the decline in raw materials. It is difficult for manufacturers to make a certain profit from the rise and fall of raw materials!
Production capacity shock, polyester taffeta has entered the edge of profit and loss
According to the sample companies monitored by China Silk City Network, it can be seen that compared with the same period in previous years, the current weaving The profits of manufacturers are relatively low. “At this time last year, we could earn over a hundred yuan a day from the polyester taffeta we produced. Now it’s pretty good if we don’t lose money. Most polyester taffeta looms can earn 10 yuan per loom, and 190T Polyester taffeta is already losing money,” said Mr. Shen, the owner of a weaving factory in Wujiang area.
Due to the impact of external production capacity, the market for conventional products this year has been in a sluggish peak season, and the market sales of these products have become even weaker in May. Some manufacturers said that polyester taffeta prices have dropped from 1.70 yuan/meter at the beginning of the year to the current 1.10 yuan/meter. (According to common sense, for every 1,000 yuan drop in raw materials, the cost of gray fabric is 0.10-0.20 yuan/meter). From the beginning of the year to now, polyester filament FDY has dropped by 1,300 yuan/ton. If only the decline caused by raw materials is counted , gray fabrics only need to fall by 0.10-0.20 yuan/meter, but now the price of polyester taffeta has dropped by 0.50 yuan/meter, of which 0.30 yuan/meter is eroding the original profit margin of the manufacturer.
It is reported that 230T polyester taffeta can still maintain a certain level of capital preservation in the market, while 190T polyester taffeta has entered the edge of profit and loss. “If the market continues like this, we will lose money every day we weave! But the machine can’t be stopped, so we can only sell it at a low price to get some cash.” Mr. Chen, the owner of another weaving factory, said.
Compared with products such as polyester taffeta and pongee, although the imitation silk series did not perform as expected in the first half of the year, it still achieved “qualified” results in the first half of the year : From March to April, the overall shipment of the imitation silk series was smooth, and most manufacturers’ inventories were at a low level. Even before and after the Spring Festival, some products (matte SPH broken card and 1/2 oblique) were in short supply, so the profit situation was good. In polyester taffeta, pongee, etc.
This year, 80% of textile factory owners will become poor…
In fact, after the 4 trillion policy in 2008 stimulated market consumption, the market took a turn for the worse in 2012. In 2017, environmental protection regulations drove the market, and until 2019, the textile industryTextile companies once again come from the crossroads of tobeornottobe. These textile companies that have gone through great storms have also clearly realized that under the pressure of environmental protection, coupled with rising prices and land, market changes will definitely change accordingly. As the problem of overcapacity arises, competition will intensify, which will gradually eat into the already small profits. In addition, workers’ wages will rise, and it will be difficult for many related production enterprises to transform. Therefore, they will naturally face the survival of the fittest. The rules of survival.
As the impact of various negative factors intensifies, the operating pressure of weaving manufacturers will increase. Some companies may even close their factories due to failure to receive orders, ultimately leading to a difficult market mentality. Fixed in the short term. Some people joke that this year, many weaving factory owners will become poor, and more than 80% are facing cash pressure, market shrinkage, environmental protection inspections, and urgent need for transformation. It’s sad, but it’s true! </p
