After experiencing the “ice and fire” situation after the New Year, the recent filament weaving market has been too calm! Even in the peak season of gold, silver and silver, it is still difficult to make waves. However, looking at the fundamentals, polyester filament stocks are stable, weaving orders are still continuing, and printing and dyeing delivery times are extended…
The market performance is developing steadily, but it is still difficult to form an impact. In the context of a weak textile environment, polyester factories are ceding profits to downstream companies, and it is not easy for downstream companies to get a share of the pie. June has arrived, which is the traditional off-season, especially for companies in the development season. Currently, they are more concerned about the external environment.
But to be honest, the market situation in various places has been constant recently, and the overall short position is greater than the long position, which is not friendly to the textile market!
Textile’s “old problem”: Environmental protection and production restrictions are coming again!
In mid-to-late May, weaving, printing and dyeing factories in Wujiang, Jiangsu were forced to limit production due to environmental issues. The government required that they open two days and stop one. This mainly affected the operating rate of water-jet looms in Shengze area by about 30%; and recently I heard again In Shengze area, due to water quality and environmental requirements, production will be open three times and stopped one day, and the production limit ranges from 30% to 50%.
The temporary suspension of production will have a greater impact on Boss Bu. Looking back on the previous times when the company suddenly stopped production, the cloth boss was caught off guard. As the only way to produce and trade finished fabrics, weaving, printing and dyeing play a decisive role. Especially at this point in the e-commerce season, production restrictions will have a certain impact on the entire downstream textile industry.
In addition, since the start of the water-jet loom environmental protection campaign in 2017, after the water-jet looms in Jiangsu and Zhejiang areas were transferred to northern Jiangsu, Anhui, Hubei, Jiangxi and other places, there have been Many migrant workers choose to return to their hometowns to work, so many factories have lost their employees and face recruitment difficulties. According to local companies in Wujiang, the recent cleanup of illegal buildings in the area and the disappearance of cheap rental houses have greatly increased the housing costs for migrant workers. Difficulty in recruiting and expensive labor has become a “long-standing problem” in the textile industry.
Power limit! Another negative policy for the textile industry
Environmental protection and production restrictions were followed by power cuts. It is really a wave of ups and downs! Recently, the “Guangzhou Orderly Power Consumption Plan for 2021” released by the Guangzhou Municipal Bureau of Industry and Information Technology on May 10 shows that the overall power supply in Guangdong Province this year is tight. Among them, the power supply and demand situation in the province is severe during the dry and flood periods and the peak period of summer. , there is a greater risk of peak shifting and power rationing. The Dongguan Humen Power Supply Bureau of Guangdong Power Grid issued a document on May 19 stating that industrial substation customers in the town must implement an orderly electricity consumption plan from May to December this year, from “opening for six, stopping for one” to “opening for five, and stopping for two”. Enterprises that implement orderly use of electricity will be subject to an additional penalty of 48 hours of power outage.
As the largest textile and clothing province in China, Guangdong is also a high-energy-consuming industry, and textile enterprises have a huge demand for electricity. Therefore, the introduction of the power rationing plan in Guangdong is bound to bring certain fluctuations to the entire textile industry.
Epidemic! Blocked shipments from terminal bases may affect supply chain circulation
Since May 21, the new crown epidemic broke out in Guangdong, and the province’s prevention and control level has been comprehensively improved, including Guangzhou, Foshan, Zhongshan, etc. The local textile market has been affected to varying degrees. In addition, with the recent situation of the new crown epidemic in Guangzhou, the demand for downstream textiles and clothing in Guangzhou is relatively large. Although it has entered the traditional off-season, it may affect terminal consumption and demand for raw materials in the short term.
According to the person in charge of the developed coastal textile enterprises, Guangzhou, Fujian, Shanghai and other places are the largest distribution and distribution centers for textile production, processing and sales in China. The Guangzhou area is the production and operation headquarters or key production and processing base of many textile and apparel brands in the world. There are quite a few enterprises in Guangdong Province that do outsourced processing for these large-scale textile and apparel brands, and they have established medium- and long-term cooperation with many processing enterprises in the mainland. Order matching and supporting business, these are said to be “domestic sales” of textile raw materials, but in fact they have become raw materials for some of the world’s first-tier brands through other trading channels.
Mainland textile companies that have supply relationships with Guangdong believe that although the possibility of epidemic outbreaks in Guangzhou, Foshan and other places is small, if a textile company or operating company encounters If the epidemic is affected, the normal supply and demand circulation of the upstream supply companies involved will be synchronized. Some coastal areas in the mainland that have direct or indirect business contacts with Guangzhou and Shenzhen are currently paying close attention to the epidemic situation and maintaining normal communication with order companies.
In addition, the impact of factors such as the domestic sales market entering the off-season, the sharp appreciation of the RMB, and the difficulty in improving Sino-European relations on foreign orders cannot be underestimated. Due to low profits, short delivery times, soaring freight rates and “hard to get a ticket”, it is not uncommon for Chinese textile and apparel companies to reject or abandon orders.
Rising costs and environmental protection lead to unstable production
Textile enterprises accept Faced with the difficult situation
Most textile people are still mentally prepared for the market situation in June. After all, according to historical conditions, if there is a big market in the weaving market, it usually occurs in March-April and September-October. Big market is generally less likely to occur in June-July. That is, in the off-season, the market will originally have to face The pressure of accumulated inventory, coupled with unpredictable environmental protection, power rationing, and production suspensions, will undoubtedly affect the normal performance of textile enterprises.Production and order delivery deadlines have a greater impact, which is equivalent to adding insult to injury to textile bosses! It also makes textile companies face difficulties in receiving orders. The textile boss said bluntly: “There was still some profit when I received the order. When I got home and calculated the latest costs, I found that the profit had been increased and we had to lose money on production!”
Therefore, textile workers need to recognize their own position and consciously limit inventory, rather than blindly produce and turn all funds into inventory to avoid falling into a difficult situation under the pressure of competition! </p
