Demand Slump, Crude Oil Slump, Textile Low Season Market, Textile Workers' Lack Of Confidence

These days, we are all witnessing the history. First, the US WTI crude oil futures contract fell 300% in the morning of 21, and the settlement price was quoted at -37.63 USD / -37.63. Then on the evening of 21 nights, WTI crude oil futures contract in June dropped nearly 70%, breaking below 6.6 U.S. dollars / barrel, hitting a record low.

The sharp drop in crude oil futures, especially in June, is a sign that the market is extremely short of confidence in the immediate and future period. Although oil prices rebounded on 22 and 23, they are still at a historic low. Of course, the collapse of crude oil is largely due to the sharp shrinkage of demand caused by the new crown pneumonia epidemic, which also includes the chemical fiber materials needed by our textile industry. So this lack of confidence is also spreading to our textile industry. The unprecedented off-season market seems to have left no hope for anyone.

Confidence is not enough, orders are not available.

The biggest problem leading to the current textile dilemma is the lack of orders, but it is impossible to have no orders at all, but there is still a lack of confidence in the market.

According to a foreign trader, their customers are a India company. Their orders are never short, and the quantity is large every time, but there are many suppliers. The original orders need to be rushing to do, but recently the customer's orders were afraid to take them, because they were worried about the difficulty of payment.
At present, India is still in a state of blockade and shutdowns. All previous fabric orders were not processed in time and sold to Europe and the United States. Unable to turn fabric into cash, customers naturally lack liquidity, nor can they pay the upstream textile enterprises on time. Normally, as long as India lifted the blockade and resumed its work, the funds would surely return gradually, and before this enterprise had never deducted the precedent of suppliers' payment, all traders could relax their minds.

But now they have no intention of receiving any orders from the customer until the epidemic is showing signs of improvement. There are many suppliers who have similar ideas with them, so now there are some orders in customers' hands. Lack of confidence makes traders no longer trust past customers who want to do anything they want.

No need for breakthrough, but for stability.

There is no confidence in the textile market. One of the most important manifestations is that many textile companies are now afraid to seek breakthroughs to solve the immediate difficulties, but to seek stability. Not willing to seek more benefits, but to avoid greater losses.

In the recent market, some conventional market fabrics have been loosened, and some dyeing factories are beginning to get busy. In particular, 190T spring Asia spinning, polyester taffeta and other products in recent demand, but there are some enterprises do not want to make this fun.

According to the director of a weaving enterprise, their factories are producing spring Asian spinning, but the specifications are all above 300T, and there is no 190T, 210T and other low density spring Asian spinning. Although these low-density products are selling well these days, they do not plan to adjust the production of machinery and equipment.

Because he thinks the market is not good, the selling of these products is abnormal and will not last long. Even if they turn around to produce these products, it may be that the gust of wind in the market has passed, and the development of new varieties of customers requires a process, which is likely to be the result of a tired inventory. Instead of doing that, it's better to be safe and be practical about what they are familiar with.

In fact, many enterprises like them, refusing to try and worry about falling into a more passive situation are also a reasonable stop loss method for textile workers. Just because everyone is satisfied with the status quo and immersing themselves in the production of familiar and regular market varieties will inevitably lead to a substantial increase in the stock of related products. Even if the market is fully recovered, the situation of oversupply of fabrics will continue, and low price competition will follow.

The lack of confidence in the textile market now and in the future has led to the fact that most textile people are more conservative, unwilling to take orders, and unwilling to fight for profits. Only when the outbreak of overseas epidemic occurs, will the resumption of labor and recovery be launched in full swing and market confidence will gradually recover and burst again.