Textile market remains sluggish: 10% increase in grey fabric inventory and 20% decrease in fabric price
Oct 24, 2019 ｜ by CT
The first half of 2019 has passed. The feeling of most textile people is that this year there are few orders. Of course, there are very few good ones, but it is difficult to promote the whole textile market, or to be fully promoted. But recently, the textile market is suddenly showing signs of improvement. The rate of opening of textile factories is picking up, and various orders are beginning to be placed. What is the situation of the market?
Textile inventories rose sharply and prices fell rapidly
The current textile market as a whole still has not gone out of the haze of the off-season, inventory is still at a high level, and the growth rate of inventory is also unusually high. According to the year-on-year growth rate of textile industry inventories announced by the National Bureau of Statistics, the first half of 2018 was relatively reasonable and stable, with both a year-on-year growth and a three-month decline. However, since the beginning of the second half of 2018, the growth rate has begun to get out of control. Even in the peak season of the textile industry, inventories are still growing. Until the summer textile season, the fourth consecutive month of inventory growth of more than 10%.
High inventory is not terrible, but the growth rate of inventory is not low. In fact, the hidden reason is that there is a serious “oversupply”. The textile industry chain is running at a high speed, but the demand of end customers is seriously lagging behind. Another phenomenon is that the price of textiles is falling rapidly.
From the changes of the factory price index of chemical fiber, cotton spinning fabric and corresponding dyeing and finishing published by the National Bureau of statistics in recent two years, we can see that the price of chemical fiber fabric and cotton spinning fabric, which are the two most commonly used textiles in our daily life, has been ended growth since the end of this year, and began to drop sharply year-on-year, and the decline is strong. There were no signs of a rebound in September.
The price of conventional silk-like fabrics has bottomed out.
The high inventory of textiles and the low prices have made some textile people worry about the future, but they also let some people see hope. Taking advantage of raw material prices, grey cloth prices, and dyeing fees are not high, enter the market to look for the bargain-hunting, and sell at a high price when the market recovers and it is the best way to deal with the current market. In fact, many people in the market have already acted.
The silk-like fabrics that fell the most this year. 75D 24T chiffon dropped from 3.3 yuan/m last year to 2.6 yuan/m... The price of all kinds of silk-like fabrics dropped mostly around 20%, and the price returned to three or four years ago. Therefore, most of the bargain-hunting investors buy such fabrics, when the price of silk-like fabric rises in spring and summer next year, and they will make a profit.
Of course, not everyone agrees with the prospect of silk-like fabrics. After all, the current inventory of such fabrics is too large. It is difficult to reduce the total inventory in the downstream market, and the power of price recovery is relatively insufficient. In fact, T400, which has been selling well recently. The main reason is that compared with the raw materials used in other fabrics, at present, the raw materials of T400 are special and the supply is limited, which leads to a limited number of downstream fabric production every year. Moreover, T400 fabric has excellent performance. There are a lot of orders in peak demand season every year. Limited supply corresponds to unlimited demand, which is bound to increase in fabric price and profit.
bargain-hunting investors may also lead to further reduction of orders in the future, all types of fabric inventory continue to increase, prices continue to decline, and the fabrics that are bargain-hunting are also likely to be converted into inventory.
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