Everyone who is engaged in the textile industry knows that the price of textile raw materials will have skyrocketed after the new year, but among all types of raw materials, the one with the craziest price increase must be spandex. Taking 40D spandex as an example, the price was around 29,000 yuan/ton in September last year, but in the past six months, the price has risen to a maximum of 65,000 yuan/ton, an increase of more than double.
After April, due to the weakness of end market orders, spandex prices stabilized , but less than a month has passed. After May, a certain spandex manufacturer raised the price again, by 2,000-3,000 yuan/ton. Business owners in the textile group reported that the price would rise to the point of doubting life!
The price of spandex has now risen to 64,000 yuan/point, with most increases starting in March. The price of bulk chemical products has all seen a certain degree of correction, but the price of spandex remains strong. Faced with the high price of spandex of 64,000 yuan/ton, downstream companies have basically adopted a purchase strategy of buying as they are used. Even so, under the operating load of more than 90% of spandex companies, social inventory has remained low and has lasted for 5 months. , downstream demand for elastic fabrics is strong, and domestic supply continues to be tight. The domestic spandex production capacity is 870,000 tons, with a monthly output of 67,000 tons. It imports a small amount (approximately 2,000-3,000 tons imported per month) and exports (approximately 6,000-8,000 tons exported per month), and the export quantity is higher than the import quantity. It has a relatively large A good import and export regulation mechanism is expected to play a certain role in maintaining the price of spandex in the future.
It is easy to “freeze to death” if you take orders, and you will “starve to death” if you don’t take orders
Textile bosses rely entirely on luck to make money!
However, in May, the downstream market is about to enter the off-season, and spandex has been raised again, which makes the market feel chilly. There are many complaints in the textile group: “The poor circular knitting machines are screwed by spandex.” The war was scarred, and the texturing factories were devastated by the fabrication.” “Let’s stop production and reduce production together!”
Since this year, there has been a situation in the textile industry where people are easily “frozen to death” if they take orders, and they will “starve to death” if they don’t take orders. Is it possible to do a business? Making money depends entirely on luck. Practitioners generally say that this is very abnormal. They work hard until the end, only to find out that they have not made much money and that they are working for foreigners for free.
Why is this?
Despite the large number of orders, overseas demand is strong, but soaring raw material or shipping costs may eat up the small profits at any time.
“Profits are really too thin, especially this year!”
A boss in the textile industry lamented, “ Last year, corporate profit margins were still 10%, but now they are only 2%.” In his view, no matter which factor it is, the most fundamental reason for the huge loss of profits can be attributed to the four words “unpredictability”.
Yes, unpredictable!
The prices of various raw materials are increasing, and the fluctuation range is extremely large. Companies are taking risks when doing business.
Many people ask, why don’t companies increase prices?
“Our contract prices are all based on the quotations when we signed the contract. We cannot say that because we are experiencing rising costs, we just tell customers to raise prices. This is not how we do business. !” The business owner said excitedly, “So no matter how much the cost is increased, the company can only bear it by itself. It is good to earn less. Sometimes we will lose money. When the price is uncontrollable, we may choose not to do some orders. Accepted.”
In addition, Chinese companies do not raise prices mainly because they dare not, because business owners are not united. If you raise prices, foreign customers will Start looking for new businesses right away.
The traditional peak season operating rate has dropped sharply
What will be the market trend in the off-season that follows?
According to relevant platform monitoring, in early April, the operating rate of looms in Jiangsu and Zhejiang reached the highest value since the Spring Festival. However, such a high operating rate lasted only a short time, and most clusters The operating rates have been falling for more than two weeks. The latest statistics show that at the end of April, the comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang was 76.05%, a month-on-month decrease of 0.49 percentage points.
The traditional peak season is still like this. Facing the following off-season, what will the market trend be like?
This year’s situation is somewhat special. According to analysts from upstream and downstream enterprises and securities firms in the textile and apparel industry chain, India is the world’s second largest textile manufacturer and exporter after China. As the epidemic in India worsens, the country’s textile companies are unable to guarantee normal delivery, and a large number of European and American textile orders have been transferred. Chinese companies have received return orders. Overseas return orders are expected to grow further from May to June this year.
A Guangdong fabric foreign trade company revealed in a recent interview with the Financial Associated Press: “In the past two days, there has been a significant increase in buyers inquiring about weaving and fabric prices. At the same time, the company The preferential margin for customers is also narrowing.”
However, some people in the industry believe that considering uncertain factors such as the epidemic, my country’s fabric companies and foreign tradeIt remains to be seen how favorable the company’s second-round production and sales situation will be. In addition, orders have been “changed” by companies in India, Bangladesh and other countries, making the contract price with already thin profits uncompetitive. Even if European and American customers place orders directly with Chinese companies, they must pay attention to increasing the contract price, otherwise it will be difficult for Chinese fabric companies and foreign trade companies to digest it.
China·Keqiao Textile Index predicts that there are still uncertainties in the time and degree of global consumer demand recovery. The export of anti-epidemic materials, which played a major role in driving growth in the early stage, has gradually declined. Only The trend of relying on a very low year-on-year base to drive growth will not continue in the long term. Therefore, it is expected that although exports will still maintain growth in the second quarter of this year, the growth rate will return to normal levels, and my country’s exports of bulk commodities such as textiles and clothing will continue to achieve restorative growth. As we enter the post-epidemic era, countries have different degrees of epidemic blockade and uneven economic recovery. In addition, shipping companies have strengthened their dominance on the entire trade route. Starting from April, shippers may face a new round of freight rate increases and Impact of Peak Season Surcharge (PSS).
Based on the trend of the domestic trade market, the overall market transactions will show a volatile and slightly downward trend in the market outlook, and the spot transactions and order shipments of spring fabrics will partially decline. Downstream demand will be partially insufficient, the market trend will be flat, and enthusiasm for fabric subscriptions will decline; due to partial reductions in orders from some traders and weaving manufacturers, the spring fabric supply will decline in the future, and spot transactions and order shipments will continue to rebound. Some batch orders for spring fabrics have declined, the operating rate of weaving companies has partially shrunk, and the output of printing and dyeing companies has shown insufficient. It is expected that the enthusiasm for subscription of mass products will decline month-on-month. </p
