There is still more than a month left before the Spring Festival, and many dyeing factories have already issued notices of early holidays. At the same time, the weak market conditions and large inventory backlogs have also forced many companies to plan to take holidays in advance, hoping for the market after the year. What is the current operating status of enterprises and clusters in various places? Is taking an early vacation a relief for him?
Raw materials fell
The market vitality of many clusters is not very good, and the holiday schedule has been extended
According to feedback from small and medium-sized cotton textile enterprises in Shandong, Henan, Hubei and other places, since mid-December, enterprises have had insufficient orders in the first quarter, and the gauze inventory rate has increased. According to the immediate cotton spot price, cotton yarn with counts below 40S has experienced a slight inversion. In addition, the impact of the epidemic on The impact of the weaving industry in Zhejiang and Guangdong has caused the operating rate of some yarn mills to continue to decline. Before the Spring Festival, they mainly focused on completing orders, delivering goods in time, and collecting payment. Considering that the inventory of raw materials such as cotton and polyester staple fiber is low, the centralized replenishment will be postponed until early February 2022.
Judging from the survey, some weaving and garment companies in coastal areas such as Guangdong, Jiangsu and Zhejiang may go on holiday around mid-January, one week earlier than in previous years. On the one hand, it will help alleviate the pressure on companies from insufficient sales orders and rising finished product inventories; on the other hand, it will Some employees from other provinces and cities went home to visit relatives and celebrate the holidays. Entering winter, local cases of the new coronavirus epidemic continue to appear in some provinces in my country, and they are blooming in many places. Therefore, various places have raised the epidemic level, tightened prevention and control policies, and taken vacations in advance.
A medium-sized yarn mill in Dezhou, Shandong Province said that at present, cotton yarn traders in Jiangsu, Zhejiang, Guangdong and other places are relatively rare in stockpiling before the Spring Festival. Short-term procurement by terminal cloth factories, fabrics, and garment factories has adjusted to a buy-as-you-go strategy, and efforts have been made to collect payment for goods. There are more and more cotton spinning mills, making it more difficult for the spot price of cotton yarn to stabilize and rebound.
In the Fujian non-cotton yarn market, prices have dropped significantly, among which the price of viscose staple fiber raw materials has dropped significantly. The order situation has not yet recovered, and the market vitality is poor.
According to denim cluster enterprises, the current production operation is basically normal. The price of denim yarn has been reduced recently, the price of indigo dye is still running at a high level, and the actual transaction volume of downstream customers is insufficient. At present, enterprises are mainly destocking, and production and sales are basically smooth. Companies place their hopes on the market after the year.
According to reports from clusters in various places, companies are focusing on destocking near the end of the year. The light production and sales situation makes companies look forward to the market situation after the Spring Festival. It is understood that in addition to paying attention to the downstream demand of the market, the important focus of spinning enterprises is still the trend of the epidemic. Many cotton spinning mills said that as the new year is approaching, the risk of the epidemic continues. Affected by the Omicron mutant strain, the market has insufficient confidence in the market outlook, and downstream companies have insufficient motivation to place orders, and they will still face challenges in the future. If the market continues to be sluggish, companies do not rule out the possibility of early holidays and hope that the market will improve after the year.
Taking an early vacation is a relief for many people
But it will be a disaster for companies eager to wait for shipments
Regarding the early holiday for textile companies this year, industry experts believe that it was definitely a bad thing in previous years. Because the year before last is the production season for spring and summer orders in the textile market, many spring and summer clothing will basically be on the market after the year. The Spring Festival holiday, the factory shutdown time for a long time, every day before the year is extremely valuable. If the holiday is postponed significantly in advance, it will be a disaster for textile companies eager to wait for shipments. But this year’s market is on holiday ahead of schedule, which may be a relief for many textile workers.
Experts explained that first of all, the market was still quiet a year ago, and the number of relevant orders received by various textile companies was far less than in previous years. Most companies were making orders for next year’s autumn and winter. It can be said that the recent spring and summer clothing orders in the textile market were absent. Because the clothing sales side still has a large amount of spring and summer clothing in stock due to the impact of the epidemic at the beginning of the year. The spring and summer market next year is basically a function of digesting inventory, so there is no need to place this order again and increase inventory.
The second is to reduce production costs. For the vast majority of textile companies, even if there are no orders, they will not easily stop production and take holidays. Once a long holiday is taken, it is easy to cause the loss of workers, and it will be more difficult to resume production. Work cannot be stopped without orders, and the expenditures on labor, water, electricity, and environmental protection will greatly increase the company’s operating costs. However, an early holiday will give textile companies a reasonable reason to stop work, which can not only reduce expenses and inventory, but also avoid avoiding Loss of workers.
The last step is to ease the order dilemma. Experts said that there are now many textile companies in the market that have received foreign trade orders, but receiving orders now is not necessarily a good thing for them. Due to the appreciation of the RMB, the shortage of shipping containers, and the increase in freight prices, most companies have experienced sharp reductions in profits or even losses. By taking the holiday in advance, the delivery date can be appropriately delayed, leaving room for the exchange rate to fall, and at the same time giving the containers some time to return to the country.
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