Orders Are Declining, And Textile Enterprises Plan To Reduce The Operating Rate Again To Meet The Traditional Off-Season Test!

Since June, the recovery of foreign trade orders has been slow, and the price has been depressed seriously. The retaliatory rebound expected by textile enterprises has not come as scheduled, and July and August will usher in the traditional textile off-season. At present, most textile enterprises focus on "maintaining stability and cash", and some enterprises plan to reduce the operating rate again to meet the coming test.

Lack of orders, dyeing and weaving factories are not fully open

After the last ten days of May, the orders of weaving enterprises declined to a large extent compared with the beginning of May. According to the data of China Silk Metropolis, as of May 29, the operating rate of water jet looms in Jiangsu and Zhejiang was 75%, down nearly 15% from the same period of previous years.

Last week, Xiaobian made a survey on the operating rate of weaving enterprises and possible subsequent production reduction measures, involving nearly 200 weaving enterprises.

The survey shows that 31% of weaving enterprises have fully opened their looms in the recent stage, 16% of weaving enterprises have a start-up rate of 7-90% at this stage, 27% of weaving enterprises have a start-up rate of 5-70%, and the remaining 26% of weaving enterprises have a start-up rate of less than 50%.

Among the enterprises surveyed, 69% of weaving enterprises intend to reduce the operating rate in June and July.

We can clearly see that the weaving enterprises are short of actual orders while the COVID-19 epidemic is still raging, and the dyeing factories have not recovered recently.

After investigation, it is found that half of the dyeing plants are open now, and 70% to 80% of the dyeing plants are open a little more. They are not busy and will not affect the arrangement.

Order recovery is slow, ensuring production and reducing losses are the top priority!

Our company makes some high-end fabrics such as silk, rayon, acetic acid, etc., which are basically exported to the United States. In previous years, our annual sales could reach more than 100 million yuan, but this year, because of the severe pneumonia epidemic and the severe disaster in the United States, our orders dropped by more than 90%, "said a trader in charge. In addition, their company has a large number of employees, and the production cost of the enterprise is also high. However, it is difficult to ensure normal production and operation with the current turnover. At present, they are totally trying to support it. As for how long it can last, everyone is not confident.

The order reduction is so large that the enterprise is inevitably in a loss state. Of course, there are not only them but also a large number of enterprises in this state, especially textile enterprises that specialize in foreign trade or have a large proportion of foreign trade.

According to the data analysis of the National Bureau of Statistics, the number of loss making enterprises in our textile industry each month in the past two years is relatively stable, about 3000. However, the number of loss making textile enterprises rose rapidly this year, reaching about 6500 in February and March. Although the number of loss making textile enterprises decreased slightly in April, it still did not return to normal.

Loss seems to be an unavoidable problem in our textile industry at present. How to avoid or reduce loss has become the top priority of all textile enterprises.

Some enterprises said that it was expected that the market would weaken. At present, foreign trade has never recovered, or even stagnated, which will have a great impact on the entire textile market. Many domestic trade enterprises, clothing enterprises, most of their orders are from abroad, so foreign trade has not recovered, the market is difficult to improve.

After June, the traditional off-season is coming, and textile enterprises will make full preparations for the off-season again. At present, the orders of downstream enterprises are mainly autumn and winter clothing and bedding, and the textile and clothing exports to Europe, the United States, Japan and South Korea are still recovering slowly.

Although cotton prices at home and abroad rose to varying degrees last week, Zheng Mian's main contract volume in September exceeded the integer level of 12000 yuan/ton, triggering a rapid rise in cotton spot prices. However, consumer end customers such as grey cloth and clothing had very limited acceptance ability, so gauze profits declined from April to May. Considering that July and August are the off-season for the cotton textile industry, coupled with concerns about the resurgence of the epidemic in the second half of the year and greater employment pressure, textile enterprises are not willing to support prices. "Ensuring production, stability and cash flow" is the top priority.

A foreign trade company in Suzhou, Jiangsu, reported that up to now, the order volume of several major customers in Europe, such as Spain and Italy, has recovered to 40-50% of the level of the same period last year, not only there are few large orders, but also the contract price is very low (the purchaser takes into account the devaluation of the RMB exchange rate and other factors). Due to concerns about the continuous rise of raw material prices, high labor costs, and the need to frequently debug equipment due to variety, affecting production capacity, domestic textile and clothing enterprises reject small quantities, multiple batches, and unprofitable orders. Some enterprises prefer to reduce production or shut down rather than accept such export orders.