In the past two days, “Hundreds of thousands of gallons of milk poured into sewers in the United States” was a hot search on Weibo.
During the Great Depression of the world from 1929 to 1933, due to the chaotic relationship between supply and demand, the United States experienced the embarrassing situation of “dairy farmers could not sell and people could not buy it.” “Milk pouring” also became a form of capitalism. A great symbol of the economic crisis.
Many people lamented, “History is always surprisingly similar,” and this scene “seems to have been seen in middle school textbooks.” “Isn’t this just like the Great Depression in the 1920s and 1930s?”
As the epidemic sweeps across the world, all walks of life are walking on thin ice, fearing that they will be accidentally washed down by this big wave and no bones will be left.
We have always said that “food, clothing, housing and transportation” are the basic needs of people’s livelihood, and the textile industry, as the source of “clothing”, has a deep understanding of this “black swan” incident.
Judging from the current situation, the number of confirmed cases of the global COVID-19 epidemic has exceeded one million, and medical supplies have begun to be in short supply. Due to different policies and medical standards in various countries, the epidemic will not end in a short period of time.
So, for textile companies, what kind of trend will be the mainstream in the next time?
Raw materials are at a new low, inventory is at a new high, cash is king!
Since the resumption of work, weaving manufacturers have been having difficulty placing orders and maintaining production and sales, leading to rising inventories. Judging from the sample companies monitored by China Silk City Network, the current gray fabric inventory of weaving manufacturers in Jiangsu and Zhejiang has risen to 41-42 days, which is about 7 days higher than the inventory of about 35 days in the same period of previous years. It is almost approaching the highest inventory during the off-season last year. 42-43 days, and we all know that the market last year was not good, and some even said “it was the worst year since starting the industry.”
It can be seen that the current inventory of gray fabrics is already scary. Gray cloth is money. If it cannot be sold, the money is sitting in the warehouse, but the looms are still producing non-stop. This puts great pressure on weaving manufacturers. Therefore, many companies choose to take a holiday during the Qingming Festival to reduce business costs.
At the same time, the current price of polyester filament has reached a record low in ten years. Specifically, the price of polyester filament FDY 150D is around 5,250 yuan/ton, and the price of POY 150D is around 4,850 yuan/ton. , the price of DTY 150D product is around 6,800 yuan/ton. The price of raw materials is already at a historical low. Boosted by the good news, most weaving companies will choose to buy raw materials at the bottom. However, cash is also required to buy raw materials. Therefore, cash is king. If you hold the cash, you will hold it. Live the lifeblood of the enterprise.
It is difficult for foreign trade to improve, and domestic trade may become the mainstream in the future!
As the epidemic becomes more serious abroad, overseas companies have insufficient operations, shortage of international transportation capacity, and major changes in supply chain timeliness and costs. Many foreign trade orders have been canceled or postponed, and foreign trade companies Facing tremendous pressure, there is even a risk of bankruptcy or closure.
In the survey, some companies said that orders from Europe and the United States have been extended indefinitely, and orders from Southeast Asia can still be shipped, but demand is still insufficient for Europe and the United States. Most of the companies that specialize in foreign trade orders are now at a standstill.
Therefore, in the coming time, domestic trade will become the mainstream of the textile market. However, in terms of domestic trade, homogeneous competition also exists. Now, due to high inventory of gray fabrics and insufficient follow-up of corporate orders, “price wars” are unavoidable. Profits have also shrunk greatly, and there are many price reductions by customers.
After the year, China Silk City Network conducted two surveys on “whether companies will switch from foreign trade to domestic trade under the pressure of the epidemic.” Most companies said they would not. But at that time, the foreign epidemic was not so severe, and some foreign trade companies still had orders in hand, so they did not consider it. However, recently, it has become common for foreign trade orders to be suspended, and logistics has almost completely stopped, making the recovery time of foreign trade unknown. Today, when most foreign trade companies are at a standstill, companies considering converting foreign trade to domestic trade may be their only hope for survival.
The repayment time is extended, companies need to be cautious when accepting orders!
In the current situation of the textile market, bosses are of course more concerned about the issue of payment than taking orders. After all, it is safest to have money in hand. You don’t have to take orders. But money cannot be given away. But judging from the current situation, it is “natural” that the payment issue will be extended. The industrial chain is intertwined, and companies in every link are now facing a tight financial situation.
The person in charge of a takeout company said: “Currently all orders from European and American countries have been postponed. The lack of cancellation shows that customers still need them, but more importantly than this, the goods placed by customers are It has come out, but if it cannot be sent, the customer will naturally not give it.I don’t know when we can get back the money we put in. In previous years, the money back was very fast, but now it basically takes 4 months. This is really stressful. If there are a few more orders like this, the company will be hollowed out. ”
Whether it is foreign trade or domestic trade, companies really need to be cautious when accepting orders in this sensitive period. It is very dangerous to accidentally encounter a canceled order. It may be that just once we return to the pre-liberation period, several years of hard work will be in vain.
The epidemic has prevented most foreign companies from resuming work, and the prolonged economic shutdown has brought about an extreme shrinkage in economic demand. All walks of life around the world will be affected. Of course, we cannot influence other countries’ epidemic prevention methods. We can only stabilize our foundation, pioneer and innovate, and not be overwhelmed by this big wave. Only by leaving green mountains behind can we fight again in the future.
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