Under The Impact Of Trade: Where Will The Textile Enterprises Face The Profit Test And The Market Downturn?

In May 13th, after the Sino US trade negotiations ended with mutual tariffs, the market faced a drastic change. Most commodity groups plunged, especially in zhengmian after two successive stops.

Not only the cotton market, but also the depressed downstream consumer market is also testing the profitability of cotton spinning enterprises.

At present,

Accelerating industrial pformation and upgrading under adversity

It is understood that this year, for a stable customer service group textile enterprises, the production and operation of normal business, full load start.

However, as the international trade situation changes, the market situation further falls, shortening the order period, slowing down the order return, reducing raw material inventories and increasing the stock of products.

Since the second half of 2018, the production and sales growth of the entire textile industry chain has slowed down.

With the recent "reversal" of Sino US trade friction, the market has once again brought impact and uncertainty.

From the downstream terminal market, internal and external demand is weak.

In some areas of the south, the recent opening rate of pulp and dyeing production lines is insufficient, and there is a special "cool" scene.

In addition, many international brands are increasingly demanding Chinese companies to set up factories overseas.

From the upstream point of view, spinning enterprises have low inventory level of cotton and yarn stock up to 2 months or so. Spinning enterprises believe that the price of cotton is still at a low level and cotton prices remain strong. Cotton is still competitive with the use of yarns. Some enterprises are upgrading cotton yarns by changing varieties to reduce cotton purchase and yarn stock.

The enterprises in Guangxi are operating normally, and the blended yarns are the main products in production.

Due to the serious aging of cotton textile workers, enterprises invested a lot of money to actively upgrade and gradually eliminate old equipment, replace spinning equipment with high automation and reduce employment.

After the Sino US trade friction, the downstream market became more pessimistic and did not dare to make long orders, resulting in the reduction of orders for spinning enterprises.

A large enterprise in Jiangsu is affected by Sino US trade friction and market downturn. Some production capacity has been shut down or only produced to roving process, so that varieties can be adjusted in time according to market demand.

Some enterprises say,

Most enterprises think that the more difficult time, the more opportunity period, in adversity, the pformation and upgrading of the whole textile industry should be accelerated and new market positioning should be caught.

Orders reduce cotton yarn stock increase

For yarn enterprises, the "golden three silver four" in 2019 is not imagined "prosperous", the current market demand is low, and the recent continuous price limit of Zheng cotton prices, so that the market in the traditional off-season is shrouded in pessimistic atmosphere.

According to the China textile daily reporter,

Among them, the profit per ton of yarn in small and medium-sized textile enterprises is generally around 800 yuan, but the situation began to change from the end of 3 to the end of the month, and demand continued to decline. In April, it became more and more weak, and many textile enterprises increased their inventories.

"From the change of cotton yarn sales, we can see that the market demand is relatively low."

The head of a textile enterprise in Shandong said that when the market was bad in 2018, the sale of cotton yarn was basically based on credit sales.

Before and after the Spring Festival this year, as demand becomes better, cash settlement becomes the main way.

When the market is the hottest, the cotton yarn sales of enterprises even adopt the way of prepayment. The enterprises do not get the cotton yarn without the first payment.

Now that market demand is weakening, cotton yarn sales are starting to sell again.

"Careful analysis of changes in enterprise orders can be found that the phenomenon of long orders reduction is more obvious."

Some textile enterprises responsible person said that after the recent downstream demand has become worse, many intermediaries and exporters' product sales patterns have also changed greatly.

Many middlemen have changed from the original inventory sale mode to the order production and sales mode. For example, the order is changed from long list to short list, or orders are placed to the textile enterprises according to the order of the end users, and the intermediaries basically have no stock.

To a certain extent, this has weakened the demand for cotton yarn and reduced the social inventory of cotton yarn.

"The sales pressure of the cotton yarn market is still increasing. The stock of our cotton yarn has increased to 1 months from the original 7~10 days. It is felt that not only the external demand is not good, but also the domestic demand appears to be a problem."

The head of a small textile enterprise in Xiajin, Shandong believes that the main reason for the decrease in domestic demand is that the market is saturated.

Analysts believe that

This aspect has made it difficult for enterprises to recover capital, increased the demand for capital, and on the other hand increased the financial cost, thus reducing the direct profit of products and the comprehensive profitability of enterprises.

Small and medium sized textile enterprises are facing a test of profitability.

Looking at the operation of textile enterprises in various provinces in China, the industry experts believe that

It is understood that

The head of a small textile enterprise in Shandong said that the downstream customers of the company were mainly cotton yarn exporters. Before September 2018, the downstream customers had more orders for cotton yarn export.

But after that, influenced by the factors such as Sino US trade friction, the sales of cotton yarn in the downstream customers went bad, and some downstream customers even closed the factory due to the lack of orders, which eventually led to a sharp decline in the sales of the cotton yarn.

In addition, the 3~6 months of previous years are the peak season for knitting yarn sales, and this year's peak season only lasts till the Qingming Festival.

In view of the difficulties faced by the textile enterprises, the pressure of recruitment, environmental protection, capital and cost is also a headache for textile enterprises.

Experts say

Compared with the operation of small and medium-sized textile enterprises,

At the same time, a large amount of manpower and material resources developed by enterprises have also achieved good comprehensive benefits. The overall competitiveness of enterprises is relatively strong, and the market position is relatively high.

"In the long run, the differentiation of textile enterprises and the restructuring of industries will continue. However, at present, many enterprises can still" live ", and the worst case in the market has not yet appeared.

Industry experts believe that