“Golden Nine and Silver Ten” has always been a saying in the textile industry, and its status is no worse than the “Little Indian Spring” from March to May. It means that in September and October every year, its sales are exceptionally better than any other month in the same year. One of the reasons is the industry rules. Entering September is equivalent to entering the fourth quarter. Clothing companies are facing domestic Double Eleven, foreign trade Christmas season, annual sales targets and other reasons, which will promote sales. The second is the weather. The cool weather of autumn is suitable for the sales of new season clothing. However, in the hot off-season of July and August, even if the market is hot, selling cloth in the scorching heat is a kind of torture. Over time, it became a habit of selling cloth in different seasons.
But if you look closely this year, you will find that under the control of various factors in the market, the “Golden Nine and Silver Ten” have begun to be forced to fail.
Polyester filament falls into a vicious cycle again
From the perspective of raw materials this month, the Federal Reserve’s inflation data reached a new high, the possibility of raising interest rates in November has increased significantly, and oil prices still face the risk of falling. As the market became bearish, polyester raw material futures began to take a sharp turn. Taking PTA as an example, it plummeted by 300 yuan in three days. On the 18th, the spot price of PTA also began to dive under the influence of futures.
As the raw material of polyester filament, PTA’s rise and fall has a great impact on polyester factories. After entering mid-October, the price drop of PTA led to downstream bearishness on the price of polyester filament, and the production and sales of polyester filament began to deteriorate. The entire polyester filament market has once again fallen into a vicious cycle in which the lower the price, the worse production and sales, and the worse the production and sales, the lower the price.
The operating rate of weaving factories in coastal areas such as Jiangsu, Zhejiang, and Guangdong has dropped again
Compared with the frequent fluctuations in the upstream raw material market, not only the price of gray fabrics has continued to fall in the past half month, but also the inventory accumulation rate of a large number of small and medium-sized textile factories has increased, which has increased the pressure on production, sales, and payment collection. A medium-sized textile company in Dezhou, Shandong Province said that the quality of the textile industry during the “Golden Nine and Silver Ten” period was insufficient, and coupled with the recent recurrence of epidemics in some areas and the upgrade of prevention and control measures, the operating rate of weaving factories in coastal areas such as Jiangsu, Zhejiang, and Guangdong declined from mid-August to September. After a brief rebound in the middle of the year, it fell again. Enterprises’ mentality in accepting orders, arranging orders, and purchasing raw materials has undergone major changes.
Foreign trade orders dropped significantly, and domestic trade actual orders decreased
From an industrial perspective, under the expectation of the “Golden Nine and Silver Ten” peak season, the downstream market recovered in September, but the good times did not last long. Market demand stagnated again in October, and confidence in the market outlook continued to fall, setting off a “cold wave” in advance.
After experiencing a short wave of orders and destocking in September, the textile market has cooled down significantly recently. During the National Day, there are many shops closed, and some shops are still on and off so far. The operating rate of Foshan circular knitting machines is about 40%, which is lower than last month, but the inventory of cloth is not high, about 20-30 days. From the perspective of the foreign trade market, although the depreciation of the RMB and the decrease in sea freight have been beneficial to exports, foreign trade companies reported that orders still dropped significantly due to the Xinjiang cotton ban and the slowdown in global consumption.
Domestic demand is still greatly affected by repeated epidemics. Orders are increasing in spring and summer, but most of them are rayon, chemical fiber, differentiated and other varieties. Orders for pure cotton are low, and not many small sample orders are actually placed. The lack of optimism in demand has made cloth shops less willing to stock up, and it is generally believed that raw material prices will fall further, so they will try to reduce the scale of purchases and focus on buying as they are used.
Generally speaking, after experiencing a sharp decline in the upstream chemical fiber raw material market, it is also facing the suppression of the terminal textile and apparel export market by the external trade situation. With the mentality of buying up and not down, the textile market in September and October this year is tepid and can no longer afford the title of “peak season”.
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