Market Data: Analysis Of Current Operation Of Filament Weaving Industry

Since 2022, under the influence of more than expected factors such as severe international political and economic situation, multi-point spread of domestic epidemic situation, high price fluctuation of raw materials and increase of labor cost, the main economic indicators of filament weaving industry are under pressure and rebounded, but the profitability is insufficient. Looking forward to the whole year, the filament weaving industry will still face the complex environment of Russia Ukraine conflict, global inflation, tightening financial environment, repeated epidemic situation and other factors, so the smooth operation of the industry is still under certain pressure.

　　 1、 Periodic fluctuation of production

Since 2022, the filament weaving industry has been faced with risks and challenges such as periodic shutdown and production stoppage in some regions, poor logistics operation, high price rise of raw materials, high temperature and other risks and challenges, and the production and operation situation has fluctuated. Especially since the second quarter, the overall weakness of the industrial chain terminal has maintained the situation of low-intensity operation.

In order to accurately grasp the overall production and operation situation of the industry, Wang Jiayi, President of China filament weaving Association, led a team to investigate industrial clusters in Jiangsu and Zhejiang, visited local governments, and exchanged face-to-face with enterprises, so as to deeply understand the production and operation status of China's filament weaving enterprises under the epidemic situation and complex international political and economic environment.

According to the survey, since the second quarter, the overall startup rate of Jiangsu and Zhejiang has been maintained at about 60%, which is at a historical low in recent years. In the same period of 2019, the startup rate is about 80%. After the outbreak of the epidemic in 2020, the startup rate of the same period also remains at about 70%. This year, the startup rate has decreased significantly. Specifically, from March to may, affected by the epidemic situation, the production and operation and supply chain operation of the whole textile industry were greatly impacted. The filament weaving industry was faced with problems such as shrinking orders and poor logistics, resulting in shutdown and production restriction; After the implementation of the "prevention and control measures" in June, China's production gradually recovered with a series of measures to stabilize the epidemic situation; From July to mid August, affected by the high temperature, the power supply is insufficient, the internal and external demand is weak, and the enterprise's enthusiasm is insufficient. Since the end of August, the power restriction has been cancelled, and the terminal orders have also rebounded slightly in a seasonal manner. The capacity utilization rate of filament weaving enterprises has increased significantly, and the production and sales rate has been greatly improved, showing obvious growth elasticity.

　　 2、 Enterprise benefits continue to bear pressure

According to the statistics of the National Bureau of statistics, from January to July, China's chemical fiber weaving and printing and dyeing finishing industry revenue increased by 9.01% year-on-year; The total profit increased by 11.63% year on year; The profit margin was 2.78%, 0.07 percentage points higher than the same period last year. In terms of industry segmentation, the business income of chemical fiber weaving industry (above the designated level) increased by 8.29% year on year; The total profit increased by 17.47% year on year; The profit margin was 2.70%, an increase of 0.21 percentage points over the same period last year. The business income of chemical fiber dyeing and finishing industry (above designated) increased by 12.00% year on year; The total profit decreased by 4.99% year on year; The profit margin was 3.1%, a decrease of 0.55 percentage points over the same period last year.

The above data show that the operation quality and efficiency of filament weaving industry has improved to some extent compared with last year, but the actual production and operation quality is obviously weaker than the current data. According to the data provided by the National Bureau of statistics, since 2022, the growth rate of China's chemical fiber weaving industry (above scale) has continued to slow down, with a year-on-year growth of 43.15% in the first quarter, 22.66% in the first half of the year, and 17.47% in January July. Compared with the same period in 2019, from January to July of 2022, the total profit of chemical fiber weaving industry (above Designated Size) will decrease by 13.60%, the loss of loss making enterprises will increase by 54.42%, and the debt will increase by 32.37%; The three expenses of enterprises increased by 14.07%, including sales expenses increased by 10.77%, management expenses increased by 19.80%, and financial expenses increased by 4.54%; Accounts receivable increased by 18.79%, and finished goods inventory increased by 35.61%.

To sum up, China's silk weaving industry has not yet been affected by the high price fluctuation of raw materials and filament end, especially the weak economic demand of weaving enterprises.

　　 3、 Steady growth of export

From January to July 2022, the export of China's chemical fiber filament weaving industry will continue to increase. According to the data of China Customs, from January to July, the cumulative export value of China's chemical fiber filament fabrics reached 12.248 billion US dollars, a year-on-year increase of 34.01% and an increase of 38.66% compared with the same period in 2019; The cumulative export volume was 12.854 billion meters, with a year-on-year increase of 20.96%, and an increase of 30.39% compared with the same period in 2019. The average price was US $0.95/m, up 10.79% year-on-year and 6.34% higher than the same period in 2019.

In the investigation, it is known that the main export places of China's filament fabrics are Southeast Asia and the Middle East. In recent years, affected by inflation pressure, exchange rate fluctuations, trade environment and other factors, Europe and the United States have turned to Vietnam, Turkey and other regions to place more orders, which has promoted the rapid development of underground tourism textile production in Southeast Asia and the Middle East, and has a certain growth in China's fabric demand.

　　 4、 Problems faced by enterprises

From the survey results, due to the international political conflict, the domestic and foreign markets of textile industry have been greatly impacted, and the industry development environment is complex and severe. The general difficulties in production and operation of enterprises are shown in the following aspects:

　　 1. Price fluctuation of raw materials

Affected by the conflict between Russia and Ukraine, the crude oil price fluctuates obviously, which leads to the price fluctuation of chemical fiber raw materials. Therefore, when receiving orders, the enterprise can not verify the fabric price, so it is difficult to grasp the profit margin. It may encounter the problem of substantial inventory depreciation. The raw material preparation is cautious, some orders can only be delayed or cancelled, and the enterprise's production planning is poor.

　　 2. Weak market demand

From the domestic market point of view, in the context of epidemic containment measures, weak consumer confidence and limited consumption scenarios, low - and middle-income consumer groups cut back on non - rigid demand spending, and clothing products perform poorly. Under the static management of epidemic situation, the home decoration industry is limited, and the demand for home textile products such as wall cloth, curtain and bedding is insufficient.

From the export market point of view, geopolitical tension, inflation in Europe and the United States "burst", tightening the import of textiles. Many enterprises reflect that the current orders have been reduced compared with the same period last year, and the gap is larger than that in 2019.

　　 Logistics is blocked

Under the influence of the epidemic situation, logistics is limited and the cost is rising. On the one hand, it hinders the transportation of upstream raw materials, on the other hand, it affects the delivery time of products, which brings risks to the production and operation of enterprises.

　　 4. The competition of homogeneous products is fierce

In the survey, we learned that due to the decline in market demand, ordinary low-grade products are facing unprecedented fierce competition, so they can only rely on low prices to sell inventory and ensure production. It is difficult to make a breakthrough in business sales. When the market is not good, enterprises relying on mass production are prone to operational difficulties, exposing the lack of core competitiveness of enterprises.

　　 5. Employment

Enterprises are faced with employment problems. On the one hand, due to the shortage of orders, the operating rate has declined, and there is a certain risk of staff turnover. On the other hand, although there is no previous difficulty in recruitment this year, the average age of front-line workers is too old, and there is a shortage of young workers. More and more enterprises begin to face the problem of lack of professional talents.

　　 5、 Development highlights

Although the development environment is complicated, there are still some enterprises that are growing against the trend and showing brilliant performance.

　　 1. Actively develop new products

During the investigation, it is learned that some key enterprises are actively transforming to develop and produce air-jet and rapier looms for weaving fabric interwoven with cellulose fiber and chemical fiber filament. This kind of elastic interweaving fabric can choose the warp and weft raw materials according to the needs, including cotton wrapped spandex, polyester wrapped spandex, nylon wrapped spandex, cotton yarn, cotton blended yarn, various cellulose chemical fiber staple fibers and filaments, etc., with rich product types, high added value and short supply.

　　 2. Focus on segmentation

Homogeneous competition will only lead to the low efficiency of enterprise resource investment, and increasing the production of differentiated products is the way to survive. Outdoor clothing has always been an important application field of filament fabric, but the product level is different. Some enterprises are only satisfied with the production of conventional products such as Nisi spinning, while others can accurately grasp the market demand, focus on the development and production of waterproof and moisture permeable fabrics, and finally become the preferred partner of overseas brands. They have deeply cultivated the field of waterproof and moisture permeability, become experts in this small market segment and establish a solid market position.

Industrial textiles are also an important application branch of filament fabrics. It is learned from the investigation that some enterprises have entered the electronic base cloth industry from umbrella cloth, raincoat and other fields. They have used their mature management system and production capacity to provide electronic base cloth for brands such as apple, Huawei and Xiaomi. The production capacity has been continuously expanded, and the transformation of enterprises and the double harvest of revenue and profit have been realized.

　　 3. Pay attention to supply chain cooperation

In today's market, we can't do things for ourselves only because of our own advantages. In the survey, many entrepreneurs mentioned supply chain collaboration and benefited from it. Some weaving enterprises and front-end spinning and texturing enterprises have strengthened joint development to give chemical fiber raw materials functionality and differentiation from the source, providing support and leading role for subsequent fabric and finished product production; Some enterprises cooperate closely with the printing and finishing enterprises in the later stage to enrich fabric varieties, shorten product development cycle, improve market response speed and lead terminal consumption through printing, coating and other processes. There is no doubt that in the increasingly fierce market competition and technological innovation, supply chain cooperation can help enterprises to make up for their own weaknesses in the development environment. It can not only ensure the basic independence of enterprises, but also obtain collaborative benefits through cooperation and mutual assistance among member enterprises.

　　 4. Clear development ideas

The development of enterprises is also inseparable from the support of the cluster government. During the visit, through the discussion with the cluster government, we learned that both the traditional industrial cluster and the emerging cluster have a clear idea for the development of filament weaving industry. Especially for the emerging industrial clusters represented by Siyang, the local government attaches great importance to the development of filament weaving industry, actively provides guarantee services for enterprises, actively cultivates leading enterprises, and drives the gathering enterprises to win-win situation. Some emerging industrial clusters have gradually developed from pure filament weaving enterprises to spinning, weaving, printing and dyeing finishing enterprises gathering. The industrial chain is constantly improved and the overall coordinated development trend is achieved.

　　 6、 Summary

Since 2022, the global economic recovery slowed down, interest rates continued to rise, leading to high inflation, and the international environment became more severe and complex. Although the domestic epidemic situation is generally under control, the impact of the epidemic is still continuing, many economic indicators are not as expected by the market, the market demand is scarce, and the production pressure is increasing. The results show that the orders of filament weaving enterprises are reduced, the product price is low, the payback cycle is long, the profit space is compressed significantly, some small and micro enterprises' cash flow tends to be tense, and entrepreneurs generally reduce their development expectations.

The textile market has a very strong seasonal law, the sales volume in the second half of the year is usually higher than that in the first half of the year. Although the overall performance is weak, but with the arrival of September, the market shows signs of recovery. It is understood that autumn and winter fabrics began to start, in addition to elastic fabrics, Chunya spinning, Nisi spinning and other down garment fabrics also have a certain sales volume. Considering that there are annual consumption peaks of double 11 and double 12 in China and the double festival consumption frenzy of Christmas and new year overseas, it is still prudent to judge that there will be a small consumption peak in the second half of the year.

It is worth noting that the current market is still in the stage of "high cost, weak demand and high production capacity". According to the statistics of China's filament weaving Association, the number of water jet looms has increased by 3579000 by the end of this year. In recent years, with the rapid development of filament weaving industry and the continuous growth of production capacity, it seems that several large polyester factories investing in weaving factories have become a "trend", constantly marching into the downstream weaving Market, with tens of thousands of units at a time, which has a negative impact on the weaving industry and has a certain impact on the confidence of entrepreneurs.

As the basic industry of clothing, home textile and industrial textiles, filament weaving industry still has obvious competitiveness and comparative advantage, and it is also an industry with international competitive advantage, so there is a good growth space. It is hoped that entrepreneurs can continue to love and stick to the filament weaving industry, accelerate the pace of innovation, strengthen the close cooperation between upstream and downstream enterprises, give full play to their own competitive advantages, take the initiative in the domestic and foreign markets, and smoothly pass through the "pain period", and promote the development of filament weaving industry to a higher level, higher quality and higher level.

(source: Jia Huiying, China filament weaving Association)