Apparel / Textiles & Accessories

Recently, raw materials such as crude oil, PTA, and spandex have been on the rise and have become the hottest spot in the market. The upstream price soars, how will the downstream market be affected?

The off-season deepens, and the number of orders received by enterprises decline

The recent gray fabric weaving market has shown a phenomenon of disconnected green and yellow, and the polarization is still obvious. Some companies received stable orders and did not decline due to the off-season. The number of orders received by some companies has decreased significantly, and there are not many orders on hand.

Weaving companies that specialize in conventional fabrics such as four-sided stretch and nylon spinning have felt the deepening of the off-season. Even though the four-sided stretch and nylon spinning grey fabrics are the best products in the recent market, they have also experienced a decline. The company’s manager Shen said: “Now there is only a little four-sided elastic order in hand, which is an export order. Foreign trade is now a little better, but the order is not easy to make. When we send out the goods, customers always say the number of meters. It’s too much trouble and it’s not profitable at all to ask for replenishment."

Manager Huang, the person in charge of an integrated industry and trade enterprise that produces conventional products such as polyester taffeta and pongee, introduced: “We mainly divide the orders for biliary fabrics and other fabrics. The fabric orders are obviously less, and there are only a few small number of orders at present. Single. The bladder cloth is very stable, and the single quantity will only increase. June to October is the peak season for bladder cloth, so it will not be bad recently."

The weaving factory's operating rate is still running at a high level

According to the survey, although the market has entered the off-season in July, many companies have also reflected the decline in orders, but the operating rate of water spray and air jet has not been affected. Most manufacturers are producing at full capacity, except for some limited production companies. , Can not be fully opened, but also reach the highest operating rate of production. Therefore, according to the data monitoring of sample enterprises on the Silk Road Network, the current water and air jet operating rate in Shengze area is about 65%.

Mr. Shen, a weaving company that specializes in conventional fabrics such as four-way stretch and nylon spinning, said: "Currently the operating rate is fully opened, which is similar to the previous one. We either suspend production for holidays or fully open. The factory is on the periphery and is not subject to environmental protection. influences."

Manager Huang, a weaving company that specializes in polyester taffeta and pongee textiles, also said that the current operating rate of the factory is 100% because the factory is in the central and western regions and has no production restrictions. It has been fully opened this year.

"Our factory has a production limit of 30%, so I can only open 70%. I can open as much as I can, and I won't drive less. In the case of unlimited production, the machine is also fully opened." Main business peach skin Manager Wang said.

Part of the grey fabric inventory continues to rise, and there is a plan to reduce the start

Judging from the operating rate, most manufacturers' machines are fully open. In fact, when the market conditions are not particularly weak, and there are no special circumstances, weaving manufacturers will not easily start operations. However, in the traditional off-season of each year, especially in July, which is the lightest, some weaving companies still collectively reduce their work in order to reduce inventory pressure.

Mr. Shen said, “At present, there are more than 4 million meters of stock in the factory, which is about the same as last year. It has not been digested. Therefore, there are plans to stop production later. The main reason is that the raw materials have risen too much and the production pressure in the factory is too great. We plan to Work during the day and stop production at night, the same as last year."

Mr. Wang said: “If the market is getting weaker in July, and the production will continue to be restricted by 30% later, the production capacity will be more balanced, but if there is no production restriction, we will probably only open 70%, and will not let too much inventory.”

Upstream raw materials are skyrocketing, but downstream companies cut prices

The recent price increase of upstream raw materials has been a bit crazy, but it seems that the upstream has derailed from the downstream, and the price increase has become a unilateral matter of the upstream. The phenomenon of rising prices of downstream grey fabrics does exist, but only a few manufacturers have raised prices. Most manufacturers still maintain stable prices, and some companies even cut prices for certain specifications of grey fabrics.

The downstream is in the traditional off-season, and demand must be weak. Although stretch fabrics sell well, it is difficult to conceal the downward trend of the overall market. With the increase in polyester filament yarn, the cost pressure for most manufacturers has not changed much, especially when there are weekly promotions, and the purchase price is still relatively favorable, which has little effect on the cost of grey fabrics. Coupled with the downturn in the market, the phenomenon of exhausted inventories appears. Compared with the increased inventory, weaving companies are more willing to choose to reduce profits and keep low inventories.

Therefore, Mr. Shen said: "It is estimated that it will be difficult for polyester yarns to have sales promotion. The raw material factory wanted to increase the price a while ago, but the business was not good, so they did not dare. It has already risen, and the price will not be reduced later. The price of grey fabrics has not yet moved. It stands to reason that we will increase the price of spandex by a few cents if it rises by 500 yuan, but the customers for the price increase will be lost, and we can only hold on with the previous price."

Manager Ye, who specializes in four-way stretch, also said that although the orders for four-way stretch have been good and the price of spandex is constantly increasing, the prices of our grey fabrics and raw materials have not changed. After all, it is the off-season now, so if you want to go up, you can't go up. The peak season comes later, and the price of spandex will definitely rise. By then, the possibility of rising prices in all directions is still very high.

Mr. Huang revealed: "We have not increased the price of grey fabrics, we have no intentions and powerlessness, and the market will not increase prices, and we will not be able to increase it. Our price changes are still market-oriented and follow the trend."

The price increase of grey cloth requires collective operation by weaving enterprises (for example: a joint price increase of 0.50-1.00 yuan/meter by 100 grey cloth weaving enterprises), unilateral price increase is difficult to maintain for a long time. However, it is difficult to increase prices in the current market. In the final analysis, it is still a problem of supply and demand. The oversupply situation has not been well resolved. In the off-season, demand is weaker and the problem of overcapacity is prominent.

It is in the off-season, and the market is not good and orders are decreasing. It is unlikely that the market will reverse in July. At present, many companies have felt that the off-season has deepened, and improvement is unlikely. However, the "Golden Nine and Silver Ten" is still very promising. The peak season performance in the first half of the year was fair, and the second half of the year is the most important stage of sales in the year, and it is expected that the performance will not be too bad.