The Market Is Cold And The Fabric Is Getting Warm.

Fabric Market

Continue to turn negative.

Domestic inflation continues to intensify, raw material prices fluctuate sharply, labor costs continue to rise, the central bank has repeatedly raised the deposit reserve ratio and loan interest rates, and the US credit has declined.

All kinds of bad news, such as "cold wind", have made the hot market gradually become deserted.

What causes the "hot" market to "cool down"?

1. Raw material price fluctuation affects fabric cooling.

From the above chart of Shengze price index, we can clearly see that starting from March, raw material prices began to drop sharply, and the prices of chemical fiber fabrics also entered a downward path.

Especially cotton, cotton prices have fallen below 19800 yuan mark, compared with the beginning of the year, a drop of 30%.

Some manufacturers bought raw materials during the price hike, but cotton prices continued to fall and cost increased significantly.

Judging from the volume of orders for Shengze's market products since July, conventional chemical fabrics with the largest demand have begun to behave mediocre, such as polyester taffeta, spring Asian spinning, light spinning, peach skin and so on.

From the understanding of market traders, many businesses are now trying to digest their inventory and return the funds to sell at low prices.

If the fabric quality requirements are not high, it can even be lower.

During the production of such orders, if the price of raw materials rises substantially, suppliers will lose money and thus affect capital turnover, so under normal circumstances, businesses will not be able to enter the awkward plight of long bills and large orders.

Two, macro environmental turbulence to curb fabric warmer.

1. "three highs and one tight"

After 08 years of world financial crisis, the textile industry in Shengze market is booming. Whether it is foreign trade or domestic sales, all kinds of orders are springing up, and the market is very good.

But since July this year, the textile industry's "three high and one tight" situation is becoming increasingly grim. "Three high" is the high price of raw materials, the high cost of labor and the high cost of financing.

Since the beginning of this year, there has been widespread shortage of workers in the Shengze market. Wage increases drive up costs.

In addition, the central bank's monetary policy remains "one month to one accurate" and "every month to raise interest rates". Many enterprises are tightening up their capital chains because of difficulties in borrowing and financing difficulties, and the downstream trading atmosphere is deserted.

Since the summer, the limitation of industrial electricity has become a problem faced by the textile industry.

The above "three high one tight" has increased the pressure of enterprise production, and also tested the demand of terminal consumer market.

2. terminal consumer confidence is not enough.

From the above chart of consumer price index and confidence index, we can see that prices are rising under the influence of inflation factors. Although residents' consumption level has not dropped down and remained stable, the pain of financial crisis has finally affected the confidence of terminal consumers. In the first quarter, a slight improvement in consumer confidence has led to an increase in consumer confidence. However, the continued appreciation of the renminbi, the improvement of the US economy and the repeated occurrence of domestic natural disasters and human calamities repeatedly hurt the consumers' appetite for the whole economic prospect and further inhibited their desire for shopping.

Thus, the supply volume of upstream weaving enterprises continues to increase, and the terminal consumer market can not be fully absorbed, so as to accelerate the "cooling down" of the textile industry.

3. the foreign trade market is deserted.

According to the traditional market, it has entered the August for the textile industry off-season, but the export situation should not be off-season, but the relative peak season of the year.

But this year, the international demand market is weak, and the consumer market, such as the US, Japan and Europe, is heading for a downturn in the wake of the "financial crisis". China's huge export-oriented economy is suffering from the severe test of the weakening of external demand.

According to the manager of a textile enterprise, this year, the profit of the foreign trade list has shrunk by 30% compared with the previous years due to the increase of raw materials, the adjustment of the export tax rebate rate, the increase of wages, the exchange rate adjustment, and the reduction of orders.

Foreign trade is no longer a "hot potato".

For the downstream market, the volume of orders shrinks, and the reduction of profits and the increase of risks for businessmen themselves cause the foreign trade market to be deserted.

According to the latest statistics released by the customs, the export volume of textiles and garments in June this year was 13 billion 947 million US dollars, down 10.14% compared with the same period last year, of which exports of clothing and accessories were 9 billion 340 million US dollars, down 3.40% compared with the same period last year, and the downstream textile and clothing export situation was less than that of the same period last year.

In summary

The fabric market is now suffering from "cold wind", the market is becoming more complex, and the market risk may continue to increase.

I believe that enterprises need to correctly grasp the sales situation, do not blindly pursue the maximization of sales volume, selective purchase orders, reduce risks, avoid some unexpected factors to bring losses to enterprises, and wait for the fabric market to be "blooming".