Textile Machinery Industry: Hidden Worries Under Hot Orders

In the first half of this year,

Statistics show that in the first 5 months of this year,

Unexpected high growth

Since the beginning of this year, most textile machinery enterprises have not made enough orders, and there has been a shortage of supply in recent years.

Especially in the textile machinery industry, a large quantity of cotton textile equipment orders are soaring, which is a surprise for production enterprises.

Since the beginning of this year, the rapid growth of China's textile industry has exceeded everyone's expectations. Especially after the financial crisis, orders have rebounded so rapidly that many enterprises are overwhelmed.

It has been described that this year's textile industry is: raw materials are rising every day, the number of owners is weak, the order of spinning and weaving enterprises is not enough, customers should bring cash to pick up the goods, and the printing and dyeing factories are busy.

The market demand of the textile industry has also been rapidly pmitted to the upper reaches of the textile machinery industry.

Since the beginning of this year, there has been a shortage of demand in textile machinery market in recent years.

Especially in the textile machinery industry, a large quantity of cotton textile equipment orders are soaring, which is a surprise for production enterprises.

In the first quarter of this year, the growth of cotton spinning equipment was mainly concentrated on the spinning machines, automatic winding machines with collective doffing and so on, which could reduce labor and improve production automation level. In the two quarter, the order of ordinary spinning machines also increased greatly. Some accessories companies even sold out all the stock in the first two years or failed to supply goods. Therefore, many enterprises in the first half of this year exceeded 100% of production and marketing rates.

In the first half of this year, Tonghe textile machinery sales increased by 200% compared with the same period last year, and the cradle increased by 150%, and compact spinning increased by 200%.

The same is true for chemical fiber equipment. The largest Canadian loom maker, Zhejiang Yue Jian spinning machinery company, sells 150 rounds per month, including the YJ1000 high speed booby machine, which has been booked until May 2011.

Comparison

Hot orders bring worries

At present, the advance payment for textile machinery equipment is very small. Once the situation changes in the second half of the year, and the new cotton market will be listed in September, the textile enterprises will have to buy new cotton and lead to shortage of funds.

Textile market looks hot this year, but there are many risks.

The cost of raw materials has risen too fast, and the profits of products have been severely compressed.

Since last June, PTA prices have risen by 35.46%, cotton prices have increased by 42.11%, polyester prices have increased by 11.4%, and yarn and silk prices have also been rising.

The industry generally agreed that the strong rebound in sales of cotton and cotton fabrics did not come from market demand, but the proportion of replenishing stocks and speculation accounted for more.

First of all, people predict that cotton production will be cut down this year, plus India's ban on cotton exports, so many enterprises will rush to buy cotton and promote cotton yarn production. Second, cotton raw material prices have risen rapidly this year, making some of the original investment real estate and coal mine investors turn to invest in cotton and cotton yarn; third, textile enterprises based on anticipation of the appreciation of the renminbi and anticipation of the price growth of raw materials, they will try hard to hoard raw materials with funds.

Driven by the above three demand factors, the textile market, especially the cotton textile market, has seen a trend of rapid growth this year. Textile machinery equipment has also seen a hot sales situation.

And this market is not entirely out of market demand, making many cotton spinning equipment manufacturers responsible for the sudden arrival of large quantities of orders, always feel unrealistic.

Some enterprises worry about whether the processed orders can pick up the goods on time. Some enterprises worry that the quality of products can not be guaranteed.

In the interview, reporters learned that a large number of orders not only failed to make the main engine factory, but also caused great pressure to the parts and components suppliers.

Due to the impact of the financial crisis, most suppliers do not have much inventory, and the main parts such as castings are stolen.

Therefore, in the case of shortage of supply, it is inevitable that the phenomenon of radish will not be washed, but the quality of products will be ignored.

In addition, whether the funds can be returned in time is a risk that textile machinery enterprises must face.

At present, the advance payment for textile machinery equipment is very small. Once the situation changes in the second half of the year, and the new cotton market will be listed in September, the textile enterprises will have to buy new cotton and lead to shortage of funds.

Industry outlook is not optimistic.

The pressure of RMB appreciation is increasing, the prices of raw and auxiliary materials are climbing steadily, the labor costs and monthly wage increases and so on. There are more and more uncertain factors. Therefore, in the first half of the year, the unprecedented abnormal situation of orders in the industry is unlikely to be reproduced in the second half of the year.

In fact, the worries of textile machinery enterprises on the market have already appeared since the beginning of July: the order of weaving enterprises has been significantly reduced, and the price of cotton yarn has gradually declined from the end of July.

The hot industry seems to be coming to an end.

At present, the pressure of RMB appreciation is increasing, and the increase of Euro risk has further increased the difficulty of textile exports.

However, the price of raw and auxiliary materials is rising steadily, labor costs and monthly wage increases are increasing. Therefore, in the first half of the year, the unprecedented abnormal situation of orders in the industry is unlikely to be reproduced in the second half of the year. The textile industry is likely to face a new round of severe tests.

In recent years, the continuous appreciation of the renminbi has not only affected the export of textile enterprises, but also affected the export of textile machinery enterprises.

The responsible person of Zhongli machine company complained about the production contract signed and entered into force by the company. Because of the appreciation of the RMB, the profit has evaporated in a flash; the Ji'nan Tianqi Ping tie company currently has nearly 50 million yuan RMB contract which cannot be traded by the exchange rate effect.

It is generally accepted that under the influence of various factors, the growth of textile industry will return to a more rational state in the second half of the year.

At the same time, the growth of spinning machines will not be as fast as that in the first half of the year.

Gao Yong, vice president of China Textile Industry Association, believes that the textile machinery industry will show a trend of high Kaiping this year and will run smoothly after July.

He believes that even if the textile industry in the second half of the demand for textile machinery equipment growth potential, textile machinery industry has not so much production and supply capacity.

Over the past two years, textile machinery enterprises gradually began to pform from original scale production to small batch and multiple varieties.

Because of this, many spinning machinery enterprises are unable to cope with the sudden orders in the first half of this year.

Judging from the special situation in the first half of this year, the spinning machinery enterprises are losing their profits. But in the long run, textile machinery enterprises must pform, and the short suffering will surely bring about long-term sustainable development for enterprises.

We are also pleased to see that even with the fierce sales situation in the first half of this year, there are few textile machinery enterprises to expand their scale. This shows that the textile machinery enterprises that have undergone so many years of market economy baptism have been very rational and mature, and the market judgement is very accurate.

Therefore, in the face of the superposition effect of various unfavorable factors in the second half of the year, we believe that the textile machinery enterprises have already made good preparations for the countermeasures.