Demand Downturn, Fabric Enterprises Did Not Get A Particularly Ideal Start

For fabric enterprises, this year's "gold nine silver ten" is particularly important.

High cost, low demand... Since this year, the fabric market performance is flat. The "gold, silver and four" peak season failed. Although the market recovered slightly in May and June, the following July and August made enterprises fall into the "coldest" summer. Now, "gold nine silver ten" time has come, if we can not seize this traditional peak season, the annual sales pressure of enterprises can be imagined.

　　 "Gold, nine silver and ten" starts uneventfully

In the past ten years, gold and silver have not ushered in the real industry. Facing this year's "gold nine silver ten", fabric enterprises still haven't got a particularly ideal start.

According to the China Keqiao Textile index released on September 5, the current textile price index closed at 107.29, down 0.29% from the beginning of the year and 0.73% year-on-year. Among them, the transaction price of polyester, polyester cotton, polyester viscose, polyester brocade and polyester ammonia fabrics decreased in an unequal volume, driving the price index of clothing fabrics down slightly.

On the same day, Shengze silk chemical fiber index issued an index warning. Due to the general market atmosphere and the instability of international crude oil price, the chemical fiber index declined accordingly. According to the data monitoring and analysis of 350 sampled price units, the chemical fiber fabric price index closed at 99.22 points, down 0.75 points compared with the previous trading day.

Zhang Feng, a researcher in Zhuo Chuang information and chemical industry, said that at present, the textile market is in a period of low and peak seasons, and the order volume is the key to the development of the next month or even several months. She pointed out that the fabric market in July was lower than that in June, and the cumulative growth in August was not reversed. In the off-season, the market did not make up for the lost demand in the early stage. She expects that with the gradual release of seasonal demand, the trend of fabric market in September will improve. "However, this peak season may not be able to achieve the expected results, the promotion of the market is limited, enterprises should not have high expectations."

"In any case, this year's" gold nine silver ten "market is certainly better than" gold three silver four. " Yu Ding Textile Co., Ltd. Sales Director Li Jiangwei performance is more optimistic. He said the company's current orders increased slightly compared with August. "The performance of woolen fabric is quite bright. The company has just sent a batch of goods to Wenzhou. However, compared with previous years, the order volume is generally small, and the profit is limited, so the enterprise is still facing development pressure."

Hu zecong, sales manager of binshiwang Textile Co., Ltd., has a similar feeling. He believes that since the middle and late August, the market demand has been recovering, and the company's inventory has been reduced. In addition, the recent Christmas orders and "double 11" orders on the market have begun to be issued. Generally speaking, this peak season can be expected. "There is hope for a small rise in product prices, but the possibility of a big rise is not large, and the industry's profits will remain at a low level."

"In the past years, the golden age was the busiest time for me." Recalling the "gold nine silver ten" a few years ago, Meng Lingtao, a salesman of Xinsheng dyeing and Weaving Co., Ltd., can not help feeling that the market is changing too fast. He believes that the price reduction for quantity may become the inevitable choice for fabric enterprises to break through the predicament in the next few months.

"I communicated with customers and found that as long as the enterprise products have advantages in price, some customers are willing to move quickly, which indicates that the market demand is still there, but the upstream and downstream are playing games." Meng Lingtao said.

　　 Price game

As Meng Lingtao said, at present, although the fabric market order situation has improved, but clothing brands and buyers "price reduction" phenomenon is common. In order to digest inventory, some enterprises can only choose to sell products at low prices.

Li Jiangwei said frankly that in the past, he did not recommend the company's salesmen to accept orders at a low price, because there was usually a very strict purchasing link hidden behind the orders. The market is changing rapidly, as long as there is a link of product prices rise, orders may not make money. "However, this year's situation is quite special, the overall market demand is not strong, enterprises still have to maintain a basic operating rate. Therefore, we depend on the situation, if customers have the possibility of long-term cooperation in the future, we will appropriately lower the price."

"We had to sell it at a low price." Chen Dehan, the person in charge of Shengtong Textile Co., Ltd., told China Textile News that the main reason is that supply exceeds demand in the market. Once the price of enterprise products is raised, it will face the risk of being "rejected" by garment enterprises. "The price of some textile raw materials has risen, but it can't be used as a" chip "for the price increase of fabric products. For example, the price of polyester filament has increased by 1200 yuan per ton recently, but the downstream buyers do not recognize the offer, and they will negotiate according to the low price of polyester filament in the early stage," he said

"The price war in the past was competition between peers, but now it is the competition between fabric enterprises and clothing brands." Hu zecong said that in recent years, the profits of the fabric industry are becoming less and less, and the price has basically been in a state of irreducible decline. However, some clothing brands and purchasers have always kept prices down, and there are only two ways for enterprises: one is to be forced to give up orders and suspend production; The other is to choose to accept orders, but the profit is shrinking. He also mentioned: "if the profit is only compressed, if the price of raw materials and dyeing costs rises, the enterprise will have the risk of falling into a loss."

It is not only small and medium-sized enterprises in the predicament of low profits, but also some listed companies deviate from the net profit. In the first half of 2022, Huafang Co., Ltd. achieved an operating revenue of 1.828 billion yuan, an increase of 8.33% year-on-year; The net profit attributable to shareholders of the listed company was 2.4292 million yuan, down 66.06% year on year. Zhejiang Yingfeng Technology Co., Ltd. achieved a revenue of 664 million yuan, an increase of 47.63% year on year; The net profit loss attributable to the shareholders of the listed company decreased by 120.17% to 11.3091 million yuan. Fujian Fengzhu Textile Technology Co., Ltd. realized 610 million yuan of business income, with a year-on-year growth of 2.26%; The net profit attributable to shareholders of the listed company was 14792300 yuan, down 53.26% year on year.

　　 Price reduction is not the only way out

Is it possible for enterprises to reduce the price for vitality only now?

In fact, not all fabric products are in the inferior position in this game. China Keqiao Textile index released on September 5 showed that spot trading volume and order delivery volume of innovative color pattern fabrics rose month on month, while price index rose slightly. "The volume of this kind of fabric has always maintained a steady rise, and the unit price of the fabric has also shown a slight upward trend recently. From the perspective of added value, it is higher than ordinary fabrics." Jiang Jianren, observer of China Textile City, said.

In this regard, Li Xiaofei, deputy director of the fashion trend Department of China Textile Information Center, pointed out that, Such a situation is expected: "due to the impact of the epidemic on consumption, some fabric enterprises will be relatively conservative in product development, some enterprises choose to continue to produce the popular products in previous years, and their competitiveness will naturally decline. While some enterprises still insist on innovating and developing products according to the market trend, they may obtain more market share." She pointed out that in terms of pattern and color, enterprises should appropriately use fashion trends to enrich product content.

"Fabric enterprises should develop and design according to the popular theme or neutral color of each season, which can not only reflect the advantages of fabrics, but also give the downstream brands accurate selection." Cao Yunfeng, senior purchasing manager of Jiangnan cloth clothing, believes that the brand pays close attention to the handle, composition and creative story behind the fabric. For fabric enterprises, fashion is an indispensable foundation, in addition, it also needs to enrich the product connotation.

Yu Xizi, creative director of original women's fashion brand lalabobo, also has a similar view: "we need more fashionable fabric products. Fabric enterprises can work hard from printing texture, technology and other aspects, and based on the concept of environmental protection and sustainability, to ensure the handle, performance and quality of fabrics. We will pay for such fabrics."

Qi Mei, director of the fashion trend Department of China Textile Information Center, suggested that at present, while the color and style of fabric products meet the consumer demand, new raw materials, such as organic cotton and recycled polyester, should be added to ensure the sustainable development and functionality of the products. "Fabric enterprises should start from color, style, raw materials and other angles to achieve more optimized design and variety development. Only in this way can they seize the opportunity and win the advantages when the" golden nine silver ten "is coming

(source: Jia Rong, reporter of China Textile News)