Demand recovery in the weaving industry is less than expected during the traditional peak season
According to the usual practice, September is the traditional peak season for the textile industry. Textile companies will have enough raw materials to open the machine. The enterprises are full of expectation that terminal demand will recover sharply after the G20 summit. However, according to this year's view, there are still fewer corporate orders and the weaving machine operating rate is also increasing slowly. The market expectation is frustrated.
With the turning of the weather, although the sales of end-product fabrics gradually recovered, due to the pre-sale of major sales, the situation of weaving companies receiving orders was still poor, and the overall start-up remained low. After the G20 summit, some restricted textile enterprises gradually Recovery started, but the overall recovery was relatively slow. Some of the company’s looms were still in a state of shutdown, and there was less tension in previous years when the machines were operating at full capacity. The market had little hope for the traditional gold nine silver ten. What are the reasons for repressing the textile season? I believe that mainly from the following aspects to analyze:
First of all, the slowdown in domestic economic growth and the sluggish foreign economy have caused a direct impact on China’s foreign trade sales. At the same time, the exchange rate of the RMB exchange rate has fluctuate more violently this year, making textile companies not dare to rush to accept large orders and long orders. Bring loss. The poor external economic environment has made the textile industry's export situation worse and worse. From January to August 2016, China’s cumulative textile and apparel exports totaled USD 178.337 billion, a year-on-year decrease of 3.33%, of which total textile exports were USD 71.815 billion, Decline by 0.50%. Many export-oriented companies are turning to domestic sales, which also increases the competitiveness of the domestic textile domestic market, and many small-scale processing textile companies are facing the risk of closure.
Second, with the sharp increase in the price of textile raw materials, the profitability of weaving products has decreased, and manufacturers' enthusiasm for production has been low. Affected by the G20 summit, polyester fiber, nylon fiber, and other chemical fiber raw materials all rose. Stimulated by the reserve cotton rotation, cotton prices rose rapidly, and the price of viscose glue also increased sharply. The cost of raw materials increased substantially, but the price of downstream textiles was presented. Out of balance, unable to digest the pressure caused by rising raw material costs. In addition, this year's environmental protection policy has exerted pressure, the cost of dyeing has continued to increase, and the cost expenditure has increased. Weaving companies are in the “sandwich layer” of the industrial chain, and the industry’s profits have shrunk. At present, many manufacturers mainly complete regular orders, and new ones increase less, and manufacturers have lower production profits. Therefore, the enthusiasm for production is not high, and most manufacturers are looking forward to improving market conditions.
Again, corporate inventory pressure remains high and demand for the weaving industry is weak. The biggest problem in the terminal market at this stage is the order issue. Textile companies generally reflect fewer orders, which results in a slow decline in weaving companies' inventory. The inventory of textile raw materials manufacturers is also high, leading downstream factories to be cautious with raw material purchases, maintaining the need for purchases, and under the pressure of higher inventory of conventional products, companies produce more orders according to orders, and the idle rate of machine factories is higher. The enthusiasm of the industry is greatly reduced.
In addition to the above-mentioned major factors, the company's tight capital chain, long return period, serious product homogeneity, and excessive supply of the market are the reasons for the long-term downturn in the textile industry. In addition, pressure from the supply-side policy this year and the country’s environmental protection efforts have increased, and many weak small and micro enterprises are facing difficulties in survival. At present, the peak textile season has not started yet, the overall demand recovery has been relatively slow, and the start-up of the weaving industry has been limited. The mentality of the industry has gradually stabilized, waiting for the recovery of demand in the later period.