Limit Production 30-50%! Another Batch Of Textile Enterprises Issue Joint Production Restriction Convention.

Recently, the Jiangsu Peixian Textile Association issued a Joint Convention on limited production.

In view of the current epidemic impact on textile exports. Supply and demand imbalance, and raw materials remain high, there is a vicious competition in yarn sales. In order to alleviate market pressure, it was agreed and agreed by members. The decision is as follows: from June 20th onwards, enterprises will limit production by 30 to 50% according to their own operation. All enterprises should be implemented as appropriate.

According to the Joint Convention, the epidemic has hit the traditional textile off-season. The pressure of Peixian textile enterprises is too large. In order to ease the pressure on inventory and capital, many textile enterprises sell at a low price, but you cut prices, I lower the price, the market is plunged into vicious competition, no one can earn money, instead, it disturb the market order. As a common organization of textile enterprises, local associations intervene and issue this. The Joint Convention also reflects the survival predicament of the current textile enterprises.

According to statistics, Peixian is located in the northern part of Xuzhou city of Jiangsu Province, and is located at the junction of four provinces in Jiangsu, Anhui and Anhui provinces. It is China's cotton yarn textile County, an important cotton and viscose yarn textile base. It owns 510 textile enterprises, 1 million 760 thousand spindles of air spun yarn and 800 thousand tons of viscose yarn.

In recent years, Peixian has vigorously promoted the development of the textile industry through the measures of "highlighting planning guidance, optimizing the development environment, promoting resource integration, eliminating backward production capacity and playing the role of the association", and was awarded the title of "China's Viscose yarn production base county" in 2017.

Millions of meters stored in the normal state, spray water, jet, circular machine enterprises have opened the "holiday mode".

Recently, several small and medium-sized weaving enterprises in Guangdong, Shandong, Jiangsu and other provinces responded. Since mid June, foreign trade companies, garment enterprises, middlemen and so on were relatively few, and grey fabric inventory increased slightly (a certain amount of liquidity). In addition, concerns about the recent outbreak of the second outbreak of new crown disease, enterprises plan to take a week off during the Dragon Boat Festival holiday.

On the one hand, enterprises have purposeful reduction in production (domestic autumn and winter lists have come to an end, and orders for 2020 spring have not yet fallen), reducing the risk of overstock of conventional grey cloth inventory; on the other hand, the prices of raw materials have continued to rise in recent years, while the prices of end products such as fabrics and clothing have been under pressure, leading to the profit of weaving mills and middlemen is too thin or even loss.

"This year, the situation is really not optimistic. Our export orders have been reduced a lot, and the demand has been reduced. The machines are still being woven, and our stock has already reached 5-600 million meters. In addition, the price of raw materials has gone up recently, but the cloth price has not risen. It is equivalent to the production of low price grey cloth with high price raw materials. In fact, it is a loss. In this case, we choose to halve the 300 looms in Langxi, Anhui. Open 50%. Around the factory start-up rate is basically around 50%, a good point in 7-8. A cloth boss in Langxi, Anhui said.

Coincidentally, a cloth boss who transferred the loom to the Henan area also revealed: "we have a lot of stocks, 7 or 8 million meters, and now the looms are only 50%. The grey cloth is basically sold at a loss. There are also some high priced raw materials that are not sold for sale. If they sell, they will lose 0.3-0.4 yuan / m."

With the deepening of the traditional off-season atmosphere and the further decline of the market, many weaving factories are short of orders, and the inventory of grey fabrics keeps rising. "The opening rate of this year's clothing is almost full, but this year it has dropped to 70%, barely enough," he said. Compared with previous years, this year's total orders have shrunk by nearly 50%, and the stock is millions of meters. Down jacket fabric has become increasingly unpopular, and later consideration will be given to reducing production.

According to statistics, at present, the rate of water injection manufacturers in Shengze has dropped to 68%, and the inventory of grey fabrics has risen to about 43-44 days, higher than the same period in previous years.

At the same time, according to the data, as of June 18th, the cotton textile comprehensive start up rate was 52.30%, and the ratio fell by 1.04 percentage points. In terms of air-jet looms, the average starting rate is 59.29%.

In the two outbreak, there was no order in the United States. The European plate had increased the demand for consultation but lacked the determination to make a final decision. Domestic demand continued to shrink, and the epidemic prevention materials in the market still occupied the mainstream.

In terms of circular machines, the average starting rate is 45.30%. With the advent of the traditional off-season, and with the shortage of orders, enterprises have started the "holiday mode" to avoid the accumulation of grey cloth inventory.

Low price and large output of grey cloth impact the market.

Since the start of environmental protection campaign in 2017, the transfer of textile industry has become a rational choice for enterprises to realize transformation and upgrading and seek breakthroughs in development. Under the high pressure of environmental protection, a large number of looms have been flooded in the central and western regions with low cost and abundant resources. But in the past two years, some large enterprises were hundreds of machines, which laid a ray of blowout for the next few years.

"The price of the grey fabric of the peripheral looms is lower, like the 210T polyester taffeta in Northern Jiangsu Province, which can be less than 1 yuan, and our own production is about 1.2-1.3 yuan / meter according to the current raw material price. But the quality of these grey fabrics is not as good as that of the local ones, and they usually produce low-end products such as polyester taffeta and spring Asian spun. In the end, a large part of these grey fabrics also flow into the local market, causing great impact on the local market! "Said Choi Chang, who owns more than 300 looms.

The surrounding grey cloth flows into the local market. Although the quality is not as good as the local ones, these grey fabrics belong to the market, and the customers do not have high quality requirements. With the temptation of low price, and the fabric is not a big problem, the price is low. The machine stopped, the rent, the depreciation of the machine, and the basic living expenses of the workers were all expenses. The boss was facing a dilemma.

The inventory of downstream weaving enterprises will be overloaded, and production and holiday will increase.

Today, raw materials have already gained a certain increase compared with the beginning of the month, but the price of cloth is still not moving. In addition, the recovery of foreign trade is not obvious. The domestic trade has gradually entered the off-season, resulting in the lack of orders. Even the epidemic prevention orders such as polyester taffeta, spring Asian spinning and conductive cloth have begun to come to an end. In the face of this situation, the cloth boss in the outlying area said that considering the comprehensive consideration, it might be possible to continue again. Cut production, or even stop it all!

"If the raw material falls, we will buy something to continue production. If it does not fall, we may have a holiday at the end of the month." The boss, who has a 50% boot rate, said. "Now this situation can only be sold at a low price, but we do not want to lose money all the time. We may have to reduce the number of machines, and more than 300 units will be reduced to more than 100 directly." Wang Chang, who moved to Henan, said.

The prevailing view in the industry is that orders are on the way, and no orders continue to take vacations. Although there is hope for August, the retaliatory rebound is still not strong. Crude oil prices are rising and falling, making the price of raw materials change faster, and enterprises' ability to resist risks is becoming weaker. It is understood that the current domestic cotton yarn, grey cloth "demotion" phenomenon is more common. We should abandon the export list with low profit, tighten the layout of domestic sales, take the initiative to reduce product grades, ensure that products are diversified and meet the needs of customers.