Even though June is the off-season, textile bosses still have orders on hand. Compared with the so-called “Red May”, the order situation of many textile bosses in June is much better than that in May.
But having orders does not mean that the textile boss has an easy life. Without profit, the factory can only maintain production…
With orders but no profits, the textile boss is distressed!
Affected by the COVID-19 epidemic, exports of the labor-intensive textile and apparel industry in India and Southeast Asian countries have shrunk severely. Some orders for textiles have returned to China, and some domestic textile companies are operating at full capacity. , operating at full capacity, but making money seems to be harder than before the outbreak?
The general manager of a foreign trade textile company: “Although the orders are not small, it is getting more and more difficult to make money. For small and medium-sized home textile companies like us, we have to use our brains to survive in the cracks.”
“Our recent order situation is pretty good, and the order volume can probably be maintained for a few months. The most difficult problem now is the price offered by many customers. It’s very low, so low that we only have a small profit, and some even have no profit, and it’s not just one or two types of fabrics that are like this, it’s the same with most of them. Only a few autumn and winter fabrics still have huge profit margins.” A textile boss in Shengze area said.
After understanding, in order to make meager profits, manufacturers of relatively good fabrics currently sold on the market, such as monofilament busbars, speed up their air-jet looms. At 700 rpm, it can only maintain capital, and the profit is very meager. Among them, the raw material cost is 2.2 yuan/meter, the current market price of gray fabric is about 2.8 yuan/meter, and the weaving fee is 0.6-0.7 yuan/meter. The textile boss can only increase the speed to minimize the loss, but the consequence of this is to speed up the machine. of depreciation.
Another type of simulated silk, false twisted silk, is also one of the hot fabrics recently, but its hot sales are caused by low-price competition among manufacturers. There are textile bosses with 600,000 meters. Sold at 3.2 yuan/meter, the market price is 3.5 yuan/meter. Among them, the net loss was 180,000 yuan, and it would take two months to recover the accounts due to the economic downturn.
After the impact of the epidemic last year, in fact, loss-making production, low-price competition, and selling at low prices are not uncommon. The prices of raw materials have fallen and risen, and the prices of polyester factories have Routines can no longer “fool” textile bosses. Today’s promotion will increase tomorrow’s price. It is not cheap in the real sense. Raw materials remain at a high level and the market is sluggish. Textile bosses have to accept that it is difficult to increase the price of gray fabrics. There are orders. The fact that there is no profit.
However, fortunately, not all fabrics in the current market are unprofitable. There are still a few autumn and winter fabrics that are quite popular and can be profitable if they last in the market for a long time.
The price of raw materials has increased significantly, and profits have been repeatedly diluted
In recent times, the epidemic abroad has remained severe. , indeed a considerable part of textile orders have returned to China. Compared with the joy brought by the increase in orders, the current rising prices of textile raw materials are even more disturbing, so companies dare not easily expand production capacity for the time being. Against the background of skyrocketing raw material prices, downstream textile manufacturers are once again under pressure. Many downstream companies do not have much bargaining power and cannot transmit prices to end customers. “One meter of pure cotton fabric has increased from 8 yuan 7 to 10 yuan 9. The wholesale price of the most common pure cotton quilt cover has increased by 8 yuan. Now it has increased again.” It’s the off-season, so business is really hard.” In the end, it became a “sandwich biscuit”, and the profits were diluted again and again. Textile raw material prices are soaring, and downstream companies will inevitably be affected. The pressure of rising prices for cotton, cotton yarn, polyester-cotton yarn, etc. is likely to eventually be shared by multiple parties such as cloth factories, textile companies, and purchasers. It cannot be solved by a large price increase in one link alone. All end parties need to make concessions.
Containers are “hard to find” and “three big mountains” squeeze foreign trade profits
Compared with companies engaged in domestic sales, Foreign trade companies have to bear the impact of raw materials and shipping costs, as well as the impact of exchange rate fluctuations.
Shipping costs:
Last year, the price of a container peaked at no more than 3,000 US dollars. Recently, it has risen to 13,000 US dollars. Shipping costs have increased. so amazing. Some routes have increased by nearly 10 times, and it is still “hard to find a box”. Ocean freight prices have tripled in two months, with import and export costs rising as well. The latest United Nations data shows that 80% of global trade relies on shipping, and 240,000 of the world’s 1.6 million seafarers are from India. As the COVID-19 epidemic in India worsens, seafarer rotation is in crisis, and entry restrictions have further intensified the impact on the shipping industry. It is difficult to alleviate this situation in the short term, and many shipping companies have issued announcements of further price increases. Exchange rate fluctuations: In April and May this year, the RMB exchange rate against the U.S. dollar showed a rapid appreciation trend. At the end of May, the onshore and offshore RMB exchange rates against the U.S. dollar both rose to 6.35 yuan, a new high in the past three years. The exchange rate was 7 when the order was signed and 6.5 when the exchange was settled, resulting in an intangible loss.�� Quite a few.
The reason is that industry insiders analyze that this is the result of multiple factors:
On the one hand , the gradual rollout of vaccination in major countries and the large-scale expansion of domestic demand support policies have promoted the recovery of global economic activities. Coupled with the rise of global online consumption and the rapid development of cross-border e-commerce, the demand for international freight has increased accordingly; on the other hand, many in the world are currently Due to the impact of the epidemic, the country’s shipping ports are still closed or in a state of chaotic management, which has caused domestic containers to encounter difficulties in unloading and being unable to be shipped back after being shipped overseas, exacerbating the shortage of containers. In addition, problems such as the failure of ships, dock workers, and freight drivers to expand their workforce in a timely manner have gradually accumulated, all of which have continued to push up shipping prices. The editor reminds that foreign trade companies should pay close attention to the recent rise in raw material prices, large exchange rate fluctuations, poor shipping logistics and other difficulties, and conduct foreign trade business based on their own company characteristics. At the same time, the person in charge of the Foreign Trade Department of the Ministry of Commerce stated that they will continue to work with local and relevant departments to implement comprehensive policies to promote the solution of these problems!
The market is still in the off-season, so don’t panic when taking orders
Now The market status is divided into three situations. One is that there are orders but no profits. This phenomenon still accounts for a large proportion now. The other type is those that have no orders, which is also a dilemma faced by a small number of manufacturers. Although the market is not optimistic this year, there are still a small number of companies that really have no orders to weave. The last type is those that have orders and profits, and such companies are in the minority. After all, it is the off-season, and the demand for many autumn and winter fabrics still exists, but it has not reached its peak.
June, the traditional off-season period of June, July and August, is almost over. The previously predicted situation in June was not optimistic, and the sharp drop in orders is now a “slap in the face” , although the profit situation is not satisfactory, orders have been continuously placed, and there are also hot-selling products. After June, one-third of the off-season has passed.
During the epidemic last year, orders began to be issued in the second half of the year. The order situation has been in a good state since August. The market situation in the second half of this year should not be disappointing. disappointment. </p
