Recently, as the geopolitical situation is confusing, the domestic epidemic situation has also experienced different ups and downs. The textile market has also become turbulent due to this impact.
Entering the traditional peak season of gold, three and silver, can the market usher in a boom?
For textile raw materials, the excitement about international oil prices has not subsided. Affected by this, textile raw materials have also been continuously raised. However, the “buy-up” mentality of the downstream has not been reflected. The prices for production and sales have been raised several times: 99.5%, 98%, 86%, The main manifestations are that the wait-and-see sentiment in the market is getting stronger, the enthusiasm for restocking downstream is sluggish, the spot sales in the textile market are still slow, and the inventory barrier is high. The current gray fabric inventory in Jiangsu and Zhejiang is about 33.2 days. Crude oil prices are rising rapidly, but downstream demand remains stagnant.
First of all, the recent epidemic in Jiangsu has been properly, effectively and timely controlled. However, just as the “Gold, Three and Silver” were about to open, some textile trade centers in Dongguan and Hangzhou were shut down due to the epidemic. Dalang Wool Trading Center in Dongguan was closed, and Sijiqing Garment Street in Hangzhou was closed.
Coupled with the outbreak of the domestic epidemic in many places, textile trade centers in many places were temporarily closed, resulting in the continued shrinkage of domestic textile market demand and the delay in the recovery period. In addition, affected by geopolitical conflicts, the international environment is complex and the future situation is unclear, which has brought unpredictable impacts to the textile and apparel industry.
The number of downstream orders received is less than expected
At present, the oversupply situation in the market is still prominent, and the high inventory situation of conventional fabrics is also serious. Compared with the inventory of raw materials, the destocking pressure of gray fabrics is greater. Judging from the past two days, although we have entered the traditional peak season, the current sales situation of weaving companies is still difficult to open up, with few products for sale, especially conventional fabrics such as polyester taffeta and pongee, which occupy a large market share. Sales were not as expected. As a result, the inventory of weaving companies continues to rise, which actually causes the raw material inventory to be transferred to weaving companies to some extent. This inventory pressure in the terminal market is probably more dangerous than the inventory in polyester factories.
Under the current situation of high supply, weak demand and high inventory, polyester filament will rely more on cost-end support in March. However, polyester filament yarn is currently following the increase in raw materials, and the focus of transactions has moved upward. However, it is far less than the increase in raw materials, so cash flow has been significantly compressed. At present, the situation in Russia and Ukraine is volatile. In the short term, oil prices are easy to rise but difficult to fall. With the support of the cost side, polyester filament yarns are also expected to rise, but the upward path may be bumpy.
Southeast Asia orders return to seize the market
Secondly, it is understood that the current situation of foreign trade orders in the market is average and weaker than domestic orders. As we all know, before the Spring Festival, foreign trade orders improved significantly and became a hot spot in the market. But after the start of the new year, this upward trend weakened, and it seemed to have returned to the calmness of last year. After experiencing various mistakes, the operating rate of looms in Jiangsu and Zhejiang finally rose to 71%. However, year-on-year, the operating rate dropped by 9%. Through in-depth enterprise surveys, we found that most manufacturers currently receive mostly small orders. , large orders are still lacking. Although there is a lack of large orders, the company’s overall executable orders can be maintained until the end of March. March is supposed to be the peak season for traditional textile foreign trade demand, but why are orders not increasing?
On the one hand, the reason is the recovery of production in Southeast Asia (statistics from the Vietnam Customs Administration show that in January 2022, the export volume of Vietnamese leather shoe companies’ handbags and umbrellas reached 390.3 million U.S. dollars, and the export volume of footwear products reached 1.937 billion U.S. dollars) and the increase in domestic labor and operating costs, most orders have returned to Southeast Asian countries; on the other hand, the conflict between Russia and Ukraine will inevitably have a certain impact on foreign trade. Since the war, we have received delayed payments and delayed shipments from customers. Feedback to reduce order size. Some companies say customers have stopped responding to messages. In an environment where a national emergency is declared, business activities are bound to be restricted.
Generally speaking, in terms of market outlook, it was found in market research that there is not much difference in corporate opinions, with most of them being pessimistic. Whether foreign trade can improve is still an important factor affecting the market. At present, there is a heating trend in some parts of the weaving production base, and most of them are domestic small batch summer orders. It is expected that the traditional peak season in the later period will not be as popular as expected, but some orders will still be released, and there will be a slight improvement.
</p
