Apparel / Textiles & Accessories

Everyone in the textile industry knows that the price of textile raw materials has gone crazy after the year, but it must be spandex that the price of all kinds of raw materials has increased the most. Take 40D spandex as an example. In September last year, the price was around 29,000 yuan/ton, but the highest price in the past six months has risen to 65,000 yuan/ton, which has more than doubled.

However, after April, due to the weakness of terminal market orders, the price of spandex stabilized, but less than a month has passed. After May, a spandex manufacturer raised the price again by 2000-3000 yuan/ton. Feedback from the business owners in the group: I am going to doubt my life!

The price of spandex has now risen to 64,000 yuan/point. During the period, most of the bulk chemical products that have increased in price have experienced a certain degree of correction, but the price of spandex is still strong. Facing the high price of 64,000 yuan/ton of spandex, downstream companies have basically adopted a purchase-as-you-use strategy. Even so, under the load of more than 90% of spandex companies, social inventory remained low and lasted for 5 months. , The demand for downstream elastic fabrics is strong, and domestic supply continues to be tight. The domestic spandex production capacity is 870,000 tons, the monthly output is 67,000 tons, a small amount of imports (about 2,000-3,000 tons of imports per month), a small amount of exports (about 6,000-8,000 tons of exports per month), and the number of exports is higher than the number of imports. A good import and export adjustment mechanism is expected to play a certain role in maintaining the price of spandex in the future.

It’s easy to be "frozen to death" if you take orders, and you will "starve to death" if you don’t take orders.

The textile boss depends on luck to make money!

However, in May, the downstream market is about to enter the off-season. Spandex once again adjusted the increase to make the market chill. There were many complaints in the textile group: "The poor circular knitting mills were scarred by spandex, and the texturing plants were caused by the former spinning. "Come to stop production and reduce production together!".

Since this year, the textile industry has seen the situation where orders are easily "frozen to death", and those who do not accept orders will be "starved to death". Whether a business can make money depends entirely on luck. Practitioners generally say that this is very abnormal. After a busy meal, they realized that they didn't make much money, and they were working for foreigners for free.

Why is this happening?

Because regardless of the large number of orders, overseas demand is strong, but the skyrocketing raw material or shipping costs may swallow up the small profits at any time.

"The profit is really too thin, especially this year!"

A boss in the textile industry lamented, "Last year, the profit margin of the company was still 10%, but now it is only 2%." In his view, no matter what kind of factors, the most fundamental reason for the big discounts in profits can be attributed to the four words "unpredictable".

Yes, it is unpredictable!

The prices of various raw materials are rising, and the volatility is particularly large, companies are taking risks when doing business.

Many people asked, why don’t companies raise prices?

"Our contract prices are all set based on the quotation when the contract was signed. It cannot be said that because the cost has risen now, we will tell the customer to increase the price, and we have not done this business!" The business owner said excitedly, "So it increased. No matter how much the cost is, the enterprise can only bear it. It is good to earn less. Sometimes it will lose money. When the price is uncontrollable, we may choose not to accept some orders."

In addition, Chinese companies do not increase prices mainly because they dare not, because the business owners are not aligned. If you increase prices, foreign customers will immediately look for new companies.

The traditional peak season's operating rate sharply callback

What will happen to the market in the off-season that follows?

According to the monitoring of related platforms, in early April, the operating rate of looms in Jiangsu and Zhejiang reached the highest value since the Spring Festival, but such a high operating rate lasted for a short time, and the operating rate of most clusters had fallen for more than two weeks. The latest statistics show that at the end of April, the comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang was 76.05%, a decrease of 0.49 percentage points from the previous month.

This is still true for the traditional peak season. In the face of the off-season that immediately follows, what will the market trend be like?

The situation this year is a bit special. According to analysts from upstream and downstream enterprises and securities firms in the textile and apparel industry chain, India is the second largest textile manufacturer and exporter in the world after China. With the worsening of the epidemic situation in India, the country's textile companies cannot guarantee normal delivery, and a large number of European and American textile orders have been transferred. Chinese companies have already received return orders. Overseas return orders from May to June this year are expected to increase further.

A Guangdong fabric foreign trade company revealed in an interview with the Cailian Press recently: "In the past two days, buyers inquiring about the prices of weaving and fabrics have increased significantly. At the same time, the company's preferential rates for customers are also narrowing."

However, some people in the industry believe that taking into account uncertain factors such as the epidemic, how much favorable support my country's fabric enterprises and foreign trade companies can receive in the second round of production and sales, still needs to be observed. In addition, the orders are "changed" by companies in India, Bangladesh and other countries, making the profitable contract price uncompetitive. Even if European and American customers place orders directly to Chinese companies, they must pay attention to increasing the contract price, otherwise it will be difficult for Chinese fabric companies and foreign trade companies to digest.

China·Keqiao Textile Index predicts that there is still uncertainty about the timing and extent of global consumer demand recovery. The export of anti-epidemic materials, which was the main driver of growth in the early stage, will gradually decline. Only relying on a very low year-on-year base to push up the growth trend will not Long lasting. Therefore, it is expected that although exports will continue to grow in the second quarter of this year, the growth rate will return to a normal level, and my country's textile and apparel exports will continue to achieve recovery growth. As we enter the post-epidemic era, countries have different levels of epidemic blockade, uneven economic recovery, and shipping companies have strengthened their dominant position on the entire trade route. Starting from April, shippers may face a new round of increase in freight rates. The impact of the peak season surcharge (PSS).

Based on the trend of the domestic trade market, the overall market transaction in the market outlook will fluctuate slightly, and the spot transaction and order delivery of spring fabrics will partially decline. The downstream demand will be partially insufficient, the market trend is flat, and the enthusiasm for fabric subscription will decline; and due to the partial reduction of orders from some traders and weaving manufacturers, the supply of spring fabrics in the future will decline, and spot transactions and order shipments will continue to recover. Partial batch orders for spring fabrics declined, the operating rate of weaving enterprises partially declined, and the output of printing and dyeing enterprises appeared insufficient. It is expected that the enthusiasm of mass product subscriptions will decrease month-on-month.