A New Round Of Market Knockout Cycle Has Begun. Where Should The Textile Factories Go?

This year, the textile industry boom is not good, the upstream polyester demand is weak, the downstream fabric inventory is too high is the current market normal. In such an environment, the reason lies in weaving excess capacity.

The market is the buyer's market, and the purchasing power determines the demand of the market. This year, affected by Sino US trade relations, the overall economic downturn in China has led to a decline in the purchasing power of clothing. From this, the textile market has entered a period of recession. In such a dull market, there will always be some cases that are not usually seen. Behind these phenomena, there are market trends, or they are the development trend of the textile industry.

01

Order fragmentation, single quantity and less normalization

Phenomenon: many cloth owners have said that although the market is not very good, the number of orders in the market is not much less than in previous years, but tens of thousands of meters or even hundreds of thousands of meters have become extremely rare, and hundreds of thousands of small ones have become more numerous.

Reasons: in addition to the huge inventory pressure faced by weaving enterprises, the pressure of inventory is also very large for garment enterprises. Moreover, with the rise of online shops, people have higher requirements for styles, cost performance and so on.

Forecast: in the future, the number of large orders will only be smaller than before, and the "small and multiple" list will become a new normal.

Opportunities: who can first adapt to this new normal, who will take the lead in the future textile market.

02

Part of the order flows to Southeast Asia.

Phenomenon: ASEAN has overtaken the United States to become China's second largest export place, in Shengze market, Bangladesh, Vietnam and other Southeast Asian countries market order accounts for about 22.5%, and this proportion is increasing.

Reason: with the rise of China's "one belt and one way" strategy and the gradual shift of the textile industry, Vietnam and other ASEAN countries have become an important transit point for China's textile exports.

Forecast: in the next few years, textile exports to Southeast Asian countries will grow at a faster rate.

Opportunities: the export of fabrics in Southeast Asian countries is mainly based on small profits but quick turnover, and the demand is bigger and bigger.

03

Increase in throwing phenomenon

Phenomenon: a lot of conventional products have been sold on the market. Many weaving enterprises have sold grey cloth at below cost, but there are still many situations where cloth can not be sold.

The reason is that the growth speed of the peripheral looms is too fast. The oversupply of conventional products in the market, coupled with the sluggish market, finally leads to excessive inventory of weaving enterprises. Too much inventory has brought huge financial pressure and can only be thrown into stock to maintain operation.

Forecast: the situation of oversupply will not be reversed, and the phenomenon of selling will continue.

Opportunity: the prices of raw materials and grey fabrics are at a low level now, and there is always a time to rise.

04

Polarization is becoming more and more serious and competition is more intense.

Phenomenon: Although many companies say that the days are very tough, some textile companies say that they are doing well, and that the downturn has not had a big impact on them.

Reason: some of the enterprises that have little influence are traders. There is no pressure on Grey stock. Now there is no shortage of orders in the market, but the situation of price reduction is quite obvious. Other enterprises have their own characteristics, which are different from the conventional products in the market, so they are less affected by the imbalance between supply and demand of conventional products.

Prediction: as the situation of supply of conventional products exceeds demand in the market, the polarization will become more and more serious.

Opportunity: it shows that the market is not completely without orders, and demand still exists.