Introduction: 2022 is a very magical year. Many people may be like the author. They do not feel the power of this year, but feel that life is not easy. Many friends said that they have been texturing for more than 10 years and have never experienced such a bad year. In the current market situation, stabilizing your cash flow and surviving until the market recovers is the greatest luck.
2021 starts high and goes low
Let’s briefly review 2021. Last year was a very good year for many textile practitioners. Due to the impact of the foreign epidemic, orders from Southeast Asia returned, the global market demand for our products increased, and the prices of raw materials increased steadily, which greatly Confidence was boosted, and the market was doing well in the first half of the year.
Therefore, during last year’s “Golden Nine and Silver Ten”, even in the days when prices were skyrocketing, under the pressure of dual control, everyone was still stocking up like crazy, looking forward to continuing to make a lot of money on Double 11. But the ideal is beautiful, but the reality is cruel. Such a story did not happen, and many products ended up in inventory and backlog. In addition, since November, the epidemic has recurred, with the outbreak of “Delta” and “Omicron” abroad, causing global panic, oil prices plummeting, and polyester prices plummeting, severely damaging everyone’s confidence.
This also sets the tone for this year. Downstream customers are in a sluggish purchasing mood and are more cautious in purchasing goods.
Turbulent 2022
After the beginning of 2022, the panic about the epidemic in foreign markets has improved significantly, and everyone has begun to achieve immunity. Crude oil prices have also begun to recover. Before demand has fully recovered, the market has begun to increase silk prices to boost silk prices. Everyone’s confidence in purchasing goods started to increase promotions in a timely manner. In fact, this series of operations before the year did not drive production and sales very well. This year, everyone was not active in stocking up before the year, or even did not stock up. On the one hand, factories have an early holiday this year, and on the other hand, everyone is bearish on prices after the year. Although crude oil prices continue to grow due to geopolitical influences, everyone does not believe that oil prices will break through 100 US dollars per barrel, and even reached 100 US dollars per barrel later. The highest point since 2008.
During the Spring Festival, although our market is in a holiday period, oil prices have quietly risen. This has also led to an unusual situation this year. Market demand is not high, but the cost side continues to rise. This has caused an abnormal increase in prices at the beginning of this year. However, then, Beijing winter At the beginning of the Olympic Games, geopolitical factors eased, oil prices lacked motivation to increase, and silk prices fell for a time. This suited customers’ wishes and catered to their bearish sentiments. As a result, they misjudged this “easy to rise but difficult to fall” market market, which remains the same. Bearish on the subsequent market. Although, from a general perspective, this may indeed be the case, no one can predict whether the conflict between Russia and Ukraine will continue for a long time and oil prices will continue to rise.
The epidemic in Shanghai that started in mid-March this year and lasted until early June further affected normal transactions that could still be carried out. Market demand once hit rock bottom, but factories did not dare to stop production easily. When conditions permitted, many companies We are still going hard in production. Even if the factory owners do less and make less losses, it will be good as long as they continue.
The sharp rise and fall of the market has also caused customers to be very cautious, but because they have no accurate grasp of the market, they dare not buy large amounts of goods. They often buy a little bit. As a result, the cost is getting higher and higher, and the price has no advantage. , falling into low profits and production losses, which further worsened the market situation, further damaged the confidence of mid-stream and downstream enterprises, and the market became increasingly depressed.
POY monthly average price change curve
Due to the sharp rise in crude oil prices, the profits of polyester factories have declined significantly, and terminal looms and texturing have been suppressed to a loss-making state. At the same time, inventory has gradually accumulated, which has also led to difficulties in corporate operating funds. In addition, the impact of the domestic epidemic has caused the cancellation of some overseas orders and the transfer of the terminal textile industry to Southeast Asia. Under the general environment of the Sino-US trade war and the objective conditions that the domestic consumer market will be difficult to recover in a short time, the textile and clothing industry has The predicament further intensified.
Overall, the market in the first half of this year may be the most difficult year in the past five years.
future survival and development
At present, the itinerary code asterisk has been cancelled, PTA has plummeted, and the cost of raw materials has decreased. Polyester factories are bound to lower their prices accordingly. In addition, polyester factories have collectively reduced production by 30%. Although it affects economies of scale to a certain extent, it is beneficial to digesting high inventory and restoring the factory’s cash flow. Therefore, it is not ruled out that polyester factories will start promotions in advance this month and carry out a strategy of small profits but quick turnover.
However, we must also take into account the drastic changes in the cost side and the lack of corresponding improvement on the demand side, which will have a huge impact on companies that originally lacked strength. Therefore,��It is also important to control the cost side, find new sales channels, and formulate the next business strategy.
Taken together, as political factors tend to ease, countries seek economic recovery, oil prices fall, and various costs decrease, we are very likely to change the depression situation in the first half of the year in the third quarter and begin to enter a stage of partial recovery. But to what extent it will develop exactly remains to be seen.
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