Textile Industry Chain "Winter"?

It has been said that the textile market "gold three silver four red May", that is to say, in the first half of 3-5, the market will gradually improve, according to the past tradition, during this period, many manufacturers will go to stock more smoothly, but this year the situation is a bit special. After the end of April, the industry inventory has an upward trend, some manufacturers have more stock, and even pile up outside the warehouse.

Jiaxing a weaving factory owner: in June, the factory may be off the holiday, ahead of the summer vacation, the stock is too high.

Wujiang is like a real silk owner Wang Zong: in the past, the imitation silk list in the factory must be finished at the end of May and early June. After the end of April this year, the order is obviously not much.

For yarn enterprises, the "golden three silver four" in 2019 is not imagined "prosperous", the current market demand is low, and the recent continuous price limit of Zheng cotton prices, so that the market in the traditional off-season is shrouded in pessimistic atmosphere.

Coupled with the recent warming of Sino US trade friction, the textile market has caused some panic, and the mentality is even worse. Looking at the increasing number of grey cloth, the list is tardy.

Inventories are half a month higher than the same period last year.

When the market is good, the weaving factories will produce more orders. When the market is not good, the Loom factory will reduce orders and strengthen the production of regular cloth.

At present, it is in a state of decreasing orders and increasing routine cloth production.

In the short term, even if the factory is able to afford the production of regular cloth, the factories that are well funded can increase the production of conventional cloth, which is likely to result in difficulties in operation due to the increase in inventory and then fall into a downtime or close down.

A factory specializing in imitation memory in Shengze says that since May, there has been no single list and stock is getting higher and higher.

We have 60 looms, now the stock is more than 80 meters, and it is already very high. At present, it is still hard to support. Now there is a list even if the profit is low. After all, no one wants to really close the factory.

In addition, Oxford cloth as the main product of bags and fabrics, this year's performance is also poor, it is reported that the recent polyester filament Oxford cloth paction is weak, factory inventory rose obviously, although the whole bullet products performance is still acceptable, according to statistics, Shengze area billet warehouse has about 38 days, compared with the same period last year, increased by nearly half a month.

Facing the increasing inventory, cloth boss's heart is secretly anxious.

Since April, many textile owners have said that if the market is still in such a slump, it will not rule out this year's advance in price, in order to seize market share.

Sure enough, on the first working day of a small holiday, textile enterprises will issue new price adjustment information: the quotation will be reduced by 5 points.

In fact, this price adjustment information is only one of many information. With the implementation of the previous orders, the new single tracking is slow, resulting in a small number of manufacturers have entered the off-season without a single state, and the stock market has increased significantly.

Although in order to retain workers and retain market share, manufacturers will not reduce the operating rate, but in the face of an increasingly weak market outlook, many manufacturers began to reduce prices at the end of April.

Vacation to reduce operating rate and ease operational contradictions

Before, we have been talking about the garment factories in Guangzhou area. This year's May Day holiday has not yet been started for five days. In recent years, most of them have been on a one day holiday. It is common for them to work overtime to make clothes. But this year's scene is compared with last year.

This phenomenon is also staged in the Haining area. It is understood that during the May 1 period, many warp knitting factories in Haining also released fake products, with less than three days and more than five or six days, and the market operating rate also dropped to 7-8.

It is learnt that, due to the good performance of warp knitting for 3 years in a row, the enterprises in Haining in 2017 and 2018 introduced over 1300 production equipment, KS warp knitting machine, which has increased by more than 20% over the original equipment, and the supply of the market has increased sharply. However, the demand for terminal has not improved as expected, which has led to Haining's warp knitting industry being dragged down by the market.

At present, many small and medium-sized enterprises are worried about receivables and increasing inventories. They can only alleviate the contradictions and difficulties in current production and operation by reducing profits or operating rates.

Reduction in credit order

"From the change of cotton yarn sales, we can see that the market demand is relatively low."

The head of a textile enterprise in Shandong said that when the market was bad in 2018, the sale of cotton yarn was basically based on credit sales.

Before and after the Spring Festival this year, as demand becomes better, cash settlement becomes the main way.

When the market is the hottest, the cotton yarn sales of enterprises even adopt the way of prepayment. The enterprises do not get the cotton yarn without the first payment.

Now that market demand is weakening, cotton yarn sales are starting to sell again.

"Careful analysis of changes in enterprise orders can be found that the phenomenon of long orders reduction is more obvious."

Some textile enterprises responsible person said that after the recent downstream demand has become worse, many intermediaries and exporters' product sales patterns have also changed greatly.

Many middlemen have changed from the original inventory sale mode to the order production and sales mode. For example, the order is changed from long list to short list, or orders are placed to the textile enterprises according to the order of the end users, and the intermediaries basically have no stock.

To a certain extent, this has weakened the demand for cotton yarn and reduced the social inventory of cotton yarn.

Analysts believe that the number of orders received, plus a higher rate of start-up, textile enterprises will definitely increase the stock of cotton yarn.

This aspect has made it difficult for enterprises to recover capital, increased the demand for capital, and on the other hand increased the financial cost, thus reducing the direct profit of products and the comprehensive profitability of enterprises.

How should textile enterprises deal with it?

01 actively go to stock

As we all know, most of the grey cloth sold is in arrears, and there is not much liquidity on the hands of manufacturers, and the pressure of funds is still great.

As a result, many enterprises will choose to reduce prices and reduce inventories in the off-season.

This can reduce inventory pressure and reduce cash pressure.

In addition, the prices of raw materials will also decrease in the off-season. Purchasing some low price raw materials at this time will be a good strategy.

02 the off-season is a good time for textile enterprises to adjust internally.

During the off-season, orders are reduced, and enterprises can check and adjust machine equipment and introduce new technologies timely.

At the same time, you can also learn more from idle time in the off-season to recharge yourself.

Nowadays, it is difficult to succeed in business only by honesty, but also need to learn more business skills and marketing strategies.

Some new products can also be developed timely, so that customers can have more choices.

03 make sales in peak season, and do market in off season.

This phrase is widely circulated in the sales sector.

It is also applicable in the textile market.

The growth of sales in the off-season will not come from the increase of the market, but rather from the reduction of the competitors.

When your opponent is slack, it is the opportunity to come and visit more customers during this period of time. It is out of courtesy. After all, customers are God, visiting customers more often, and making customers feel that you are a conscientious person, so the possibility of a single deal is greater.

Editor's note: now the deterioration of Sino US relations has a certain impact on the Chinese market, and Southeast Asian textile is also accelerating the consumption of Chinese market share, so the second half of this export needs to wait and see.

From the perspective of domestic sales, the blowout of external capacity is the biggest negative factor.

In addition, the cost pressures of cloth boss are also increasing. The outlook for the second half of the year is not very clear. At present, we can only expect this year to be a cold winter. We hope to drive the demand in the second half of this year.