“2019 may be the worst year in the past ten years, but it will be the best year in the next ten years.” When we saw Wang Xing’s words circulated in 2019, we didn’t take it seriously, but we didn’t expect that it turned out to be a prophecy.
We are already halfway through 2022, but it is still not easy. The Russo-Ukrainian war broke out in February, the epidemic started in March and April, and in June, heavy rains started again. Commodity inflation, currency depreciation, logistics disruptions, the inability to start work, soaring prices, and many companies, including foreign giants, went bankrupt due to rising costs.
Skyrocketing costs
Netizens said they can no longer afford Uniqlo.
It is worth noting that Uniqlo, a large clothing brand, announced on the 7th that it will increase the prices of some autumn and winter products in the Japanese market. The price of ultra-light down jackets will increase from 5,990 yen to 6,990 yen (approximately RMB 350). The price of cashmere has been increased from the original 1990 yen to 2990 yen (approximately RMB 149).
Faced with Uniqlo’s price increase, many netizens said, “We can no longer afford it.”
Crude oil has continued to rise this year, and manufacturing costs have risen sharply. Manufacturers have no choice but to raise prices. But this is only limited to large companies with brand advantages. The price increase path for small and medium-sized enterprises has become extremely tortuous!
Judging from the current terminal sales, the temperature has been gradually rising recently, and the climax of summer clothing purchasing is coming. However, consumers’ purchasing desire is not high. Clothing stores are deserted compared with previous years. The current income of some clothing stores can only cover the costs. Theoretically speaking, cotton and chemical fiber have increased significantly since this year, and the textile industry is under pressure. There should be upward pressure on midstream and downstream prices, but the fact is the opposite. This phenomenon is thought-provoking.
At the same time, the pressure of rising raw material prices will gradually be transmitted downwards, and will ultimately be borne by consumers. However, judging from the current situation, the significant increase in cotton and chemical fiber prices has not been successfully transmitted to end-use clothing. In the intermediate gray fabric link, it is even cheaper than in previous years.
The recent opening rate of fabric market is insufficient
Loss occurs due to difficulty in price transmission
Jiangsu gray fabrics: The current average operating rate is about 70%. Some weaving mills only operate night shifts and the day shifts have holidays. The price of cotton yarn raw materials fell, the market was sluggish, product inventories increased, and the production and sales rate was lower than normal levels. Foreign trade orders have resumed growth, and prices have dropped by about 30% year-on-year. Short orders, urgent orders, and small orders are the main ones, and operations are at a loss. Some downstream home textile brands have opened ordering meetings, and the regular varieties are in a wait-and-see mode, with few actual orders. Affected by factors such as the inverted price difference between domestic and foreign cotton and the Xinjiang cotton problem, downstream orders are expected to remain sluggish.
Guangdong denim: Recently, the price of cotton raw materials has been slightly reduced. The price of pure cotton OEC 10 British denim yarn has increased slightly to 17,100 yuan/ton. The price of indigo dye remains strong, with the supplier’s quotation of 74,000 yuan/ton. Enterprise production costs are high, while the downstream market is weak, orders are insufficient, the operating rate is about 70%, and inventory pressure is high. The obvious decline in demand has led to a lack of business confidence in business operations and a strong wait-and-see mood in the downstream market. It is expected that the market downturn will continue for some time.
Lanxi gray fabric: raw material prices fell but transactions were light. Affected by the market downturn and problems such as Xinjiang cotton, downstream orders have shrunk severely, product inventories are high, and companies have no profits at all. A small number of companies have lowered their operating rates and are operating at a loss. The off-season is getting weaker, coupled with the United States’ suppression of Xinjiang cotton, the market outlook is relatively pessimistic.
Jiangsu yarn-dyed fabrics: The overall market is weak, sales are slowing down, sales are basically stable, follow-up orders are weak, and product prices have not changed much. Upstream raw material prices remain high and fluctuate, cotton yarn prices have dropped, and most companies purchase on demand. Due to the high cost of various production factors, corporate profits continue to be squeezed. In view of the current market operating situation, most companies are in a wait-and-see mood.
Hubei pure cotton cloth: At present, logistics efficiency has improved, but the market is still running at a low level. Foreign trade orders are subject to traceability restrictions, and orders are rare and basically unprofitable. The opening rate is about 50%. Product inventories remain high and operating pressure continues to increase. The market is expected to remain status quo in the short term.
picture
Terminal clothing sales encounter bottlenecks
The market is still in a relatively difficult stage
At present, most weaving factories still report that new orders are scarce, the market transaction atmosphere is deserted, and the inventory pressure of gray fabrics in factories is high. In addition, the price of textile raw materials is at a high level, and downstream profits are significantly compressed, so orders are particularly cautious. Orders are relatively low, the operating rate of weaving factories continues to run at a low level, the market has a strong wait-and-see sentiment, and the current market is still in a relatively difficult stage.
From the perspective of fabric downstream market demand, affected by various factors this year, residents have a conservative attitude towards clothing consumption, terminal demand is relatively sluggish, and the cost transmission of the textile and apparel industry chain is relatively limited. In addition, from the perspective of brands and terminal distributors, due to theThe gross profit margin of �� is acceptable, and the sales competition of terminal clothing is fierce. Even if the costs are transmitted to downstream, terminal sales merchants tend to absorb it themselves in the short term to prevent the loss of market share caused by rash price increases.
At present, terminal clothing sales are encountering bottlenecks. How to break out of the circle of restricted demand is an issue that midstream and downstream companies need to focus on next.
</p
