Recently, the above scenes of queuing up to unload goods have appeared at the entrance of various dyeing factories. Outsiders may think that this is an explosion in the textile industry, and they have already started queuing up. Unloading, this year will definitely be a profitable year. But in fact, the explosion of orders is an illusion, and the bosses of textile companies are all suffering.
The warehouse explosion is fake, but the “production reduction” is real
In recent times, the “wave of power rationing and shutdowns” has swept more than 10 provinces across the country, although power consumption peaks have also exceeded limits in previous years. However, the situation of “opening for two days and stopping for five days”, “limiting production by 90%”, and “thousands of companies suspending and limiting production” are unprecedented. Relevant monitoring platforms show that at present, the startup rate of elasticated looms in Jiangsu and Zhejiang has dropped from more than 80% before the Mid-Autumn Festival to about 60%, and the startup rate of looms has dropped from about 60% to about 40%. This is also the lowest since the Spring Festival this year. lowest level. In previous power cuts, relevant departments would notify them in advance to give companies a buffer. However, this time the power cuts are uncharacteristic and have an impact on the company’s normal production and operation. If there is a long-term power outage, production capacity will definitely not be able to keep up with demand, and orders can only be further reduced, making the supply on the demand side even tighter.
Nowadays, the supply of goods is very scarce during the traditional peak season of Gold, Nine and Silver Tens. The superimposed dual energy consumption control and vigorous attack will lead to the supply of high energy consumption products. The printing and dyeing factories, as the intermediate links in the entire textile industry chain, are in an awkward position. Against the background of the continuous increase in prices of the three traditional energy sources “water, electricity, and gas”, they are also affected by various chemical industries such as dyes, auxiliaries, and large chemicals. The price increase has put textile, printing and dyeing companies facing huge operating pressure, and the situation is quite severe.
Profits are being squeezed, and textile companies are in a dilemma
“As soon as the National Day comes back, the entire textile circle is in chaos. All raw materials such as cotton and cotton yarn in the upstream are rising rapidly, with prices rising every day .” The editor said in an interview with a senior industry insider. “With the surge in raw materials, gray fabrics, fabrics, printing and dyeing, etc. have also been affected by the trend. The textile market has set off a vigorous ‘tide of price increases’ that has never been seen before.”
Due to the rapid rise in the price of textile raw materials, a large number of traders have adopted the strategy of “high quotation, low transaction”, holding back the market, waiting for the price, or even choosing to break the contract; in the expectation of RMB appreciation, Next, imported yarn is also in a “closed” state without quotation. In order to ensure production and delivery, a “fabric rush” has also begun in the textile industry.
With the skyrocketing prices of raw materials, cotton gauze, and fabrics, textile and clothing exports are in a dilemma.
First of all, at present, most foreign brands and retailers do not accept the increase in quotations from textile and garment enterprises and foreign trade companies. The increase in raw materials and gauze is difficult to pass on to end orders. Export-oriented enterprises have relatively poor affordability. Limited, so either “abandon the order” or absorb the rising costs of cotton, cotton yarn, etc. on their own. No matter which choice they make, production companies will be in pain.
At the same time, due to the extreme rise in raw material prices and the double blow of power and energy restrictions, profit margins have been continuously squeezed, and delivery times cannot be guaranteed or even predicted, resulting in over 30% A large number of on-hand projects were quickly lost to traditional textile production areas such as Pakistan, Bangladesh, India, Turkey and even South America. At the same time, the strengthening of the RMB exchange rate will further squeeze profit margins. The market situation in the later period is unpredictable, and it may become more difficult to receive foreign trade orders.
The editor has something to say
The sudden “power limit and production limit” caught the entire textile industry chain off guard, with reduced production capacity, rising raw materials, and shortages from the raw material end to the end. It is reflected on the demand side. However, the impact on upstream raw material supply is less than downstream demand. Generally speaking, the higher the energy consumption in the downstream, the greater the impact, which is negative for the raw material market.
But as the saying goes, crises always coexist with opportunities. The “power rationing and production restriction” incident can be seen as a lever for the structural adjustment of the textile industry. Only through technology Only by promoting the upgrading of the industrial structure with digital and developing it into a digital and technology-intensive industry can the dilemma faced by the industry be fundamentally solved.
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