The Spring Festival is getting closer, and factories in the textile industry are also shutting down for holidays. Gray fabric companies currently focus on clearing inventory and collecting payments. Therefore, at the end of the year, the “sales of goods” in the gray cloth market come and go, so lively!
NO.01 Weaving enterprise sells goods to recover blood
The entire weaving market has been plagued by overcapacity and an imbalance between supply and demand. Manufacturers lack bargaining power and prices have been falling. Some textile owners even sell at a loss in order to reduce inventory. As a result, prices in the entire market have become chaotic, falling all the way to low prices in recent years:
190T polyester taffeta fell from 1.5 yuan to 0.9 yuan;
100D four-sided bullet dropped from 2.4 yuan to 1.6 yuan;
240T pongee dropped from 1.8 yuan to 1.3 yuan;
…
This year, the overall market performance is not good, and the payment time is longer than in previous years. Therefore, this year’s payment may not be fully recovered. But the end of the year is when manufacturers need a lot of cash. Cash is needed for workers’ wages, supplier payments, advance purchase of raw materials, etc. If the payment for the goods is not returned, the manufacturer will have to sell the goods in order to collect funds. But sadly, even if the goods are sold, the effect is not very obvious. Fabric merchants are not very motivated to purchase, and many traders do not want to take the opportunity to stock up on low-priced gray fabrics.
“It is really difficult to do physical business this year. Take pongee as an example. 240T pongee has dropped from 1.8 yuan/meter last year to 1.3 yuan/meter now. The price of selling goods is even lower. Raw materials, rent, water, electricity, and labor are all free, but the price of gray fabrics is so low.” said a cloth boss who has been dealing with Chunya Textile for more than ten years.
The selling price at the end of the year was lower than usual, almost close to “free money”! In fact, for cloth bosses, cutting prices and selling goods is a helpless move, just to relieve financial pressure. During the visit, many cloth bosses hoped that there would be a wave of orders for gold, three, and silver next year, and they could take the opportunity to go There is a wave of inventory, but I don’t dare to have too much hope. After all, the market in 2023 is unpredictable.
Although price wars are a negative phenomenon in the market, under today’s market conditions, they seem to be more tolerable. For most textile bosses, price wars are a helpless move, just to relieve inventory and financial pressure. For most textile bosses, price wars are a helpless move, just to relieve inventory and financial pressure. When a large number of orders are placed, grabbing orders is the only way to remove inventory. In today’s market full of gray fabrics, price competition may be the only bargaining chip to win orders.
NO.02
Year-end destocking is quite effective
According to data monitoring from Silkdu.com, the current gray fabric inventory of weaving enterprises in Shengze area is about 36 days. In fact, the current gray fabric weaving inventory is lower than in 2019, 2020, and 2021, and is about 3-4 days lower. This is mainly due to the early spring break this year. Many factories have reduced production, and many companies have taken holidays early, which has led to a decrease in production capacity at the end of the year. In addition, the intensity of sales has been strong, and a wave of inventory has been reduced.
This year, gray fabric manufacturers have a large inventory. The main factor is that the downstream garment industry has a large inventory. Due to the anticipation of cold winters in previous years, most clothing companies have stocked up on cold-proof clothing. In addition, under the influence of the epidemic this year, down jackets and cotton clothing have become further unsaleable, and the clothing industry does not dare to stock upstream. It also caused an imbalance between supply and demand for gray fabrics.
Entering 2023, a new season of spring and summer clothing is also being prepared. Unlike down jackets, spring and summer fashion has relatively high requirements for style, so it needs to be re-printed and purchased. Therefore, the rigid demand for fabrics still exists. “Currently, we have received orders for April, all of which are imitation silk fabrics, for next spring and summer orders.” A textile boss said.
Editorial
According to usual practice, after the Spring Festival in previous years, the trading atmosphere in the market will gradually recover, and domestic demand and foreign trade orders will be further released. Next year, being the first year after the epidemic policy is relaxed, is expected to be a year of improvement, which is still worth looking forward to!
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