The start of the new year has arrived. According to research, as of February 7, about half of the textile companies have started work, mainly medium and large textile companies. This year, due to epidemic prevention and control restrictions and some companies’ provisions for employees who do not return home, Due to factors such as incentives, there are fewer employees returning home, and most employees from other places have returned to the company’s location on the fifth and sixth day of the first lunar month. Therefore, the overall resumption of work and production is good, with the arrival rate reaching about 80%. Most of the textile companies that have not yet started work plan to start work within a week. Heavy snow has fallen in Jiangsu, Anhui and other places in the past two days. The rain and snow weather has caused traffic inconvenience, which has a slight impact on the resumption of work, production and transportation.
Jiangsu enterprises generally start operations earlier than expected
But it will still take some time for the market to fully return to normal
On February 7, various parts of Jiangsu gradually resumed work and production, but some areas experienced cooling and snowy weather, which affected corporate purchases and sales to a certain extent. An industry insider in Yancheng, Jiangsu Province reported that the weather was mostly sunny and good in the early stage, and most employees from other places returned to work one after another on the 5th and 6th. Although traffic has been affected to a certain extent by the snowfall after the holiday, most companies still operate normally and consume the remaining raw materials before the holiday. Currently, companies have different orders on hand, the production and sales situation has not changed much yet, and operating efficiency is average. Textile enterprises said that the textile market trend after the holiday is still unclear, and they will pay close attention to changes in market trends after the holiday to ensure the orderly production and operation of enterprises.
As of February 6, nearly half of the textile factories in Suzhou, Anhui Province have started operations, mainly processing pre-holiday orders, earlier than the pre-holiday scheduled time. The reasons for early start are as follows: First, the prices of products for pre-holiday orders are basically locked. Start work and deliver orders as early as possible to reduce post-holiday inventory pressure; secondly, Zheng cotton trading was suspended during the Spring Festival, but external prices continued to rise, and the market expected domestic futures spot prices to follow suit. The person in charge of a textile company said that due to the limited lint inventory of the company before the holiday, in order to understand the market conditions as soon as possible and make timely adjustments to the inventory of raw materials and products, work will start early after the holiday; thirdly, starting work early will help the workshop workers to stabilize and not be lost, saving time. After that, all work can quickly return to normal track.
At present, companies generally start operations earlier than expected, but the Spring Festival atmosphere is still strong and it will take some time for the market to fully return to normal.
Downstream customers are more motivated to purchase than before the holiday
The smooth transmission of raw material prices to the downstream becomes the key to the market outlook
Downstream textile companies have resumed work and production one after another, and some companies have started up late. It is expected that the industry will be able to fully resume production after the tenth day of the first lunar month. Downstream textile companies said that there are currently few new orders, and the production starts on the first day after the holiday are basically for production and delivery of pre-holiday orders. There are also companies that have not received new orders and choose to start up early in order to stabilize their workforce. Raw materials surged on the first day after the holiday. Downstream customers were more enthusiastic about purchasing than before the holiday, and quotations rose slightly. Nowadays, the industry has low inventory. As the inventory of raw materials is consumed, the willingness of enterprises to purchase will gradually increase. Whether the upstream can continue to be strong is critical to the smooth transmission of raw material prices to the downstream.
All in all, driven by factors such as rising raw material prices and holding costs and improving market confidence, there is a strong willingness to increase raw material prices, and a good start is a foregone conclusion. However, how long the increase can last depends on how the demand side continues the story.
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