Weaving enterprises focus on destocking

Changzhou Fubang chemical fiber Machinery Factory

According to the feedback of textile enterprises in Jiangsu, Zhejiang, Hebei and Shandong, high inventory and low flow are the characteristics of the current textile market.

Textile enterprises in advance of the holiday to concentrate on inventory

A yarn factory in Zhengzhou, Henan Province mainly produces 40S and below yarn. The inventory is as high as more than 30 days. The company decided to have a holiday on December 20th, but all the sales staff continued to work and insisted on destocking. In some cases, companies have set up specific incentives and even raised the sales commission by 50 percent. The head of a textile company in Shijiazhuang, Hebei province, said that now that the prevention and control policy is being loosened, they are sparing no effort to contact old customers and can deliver goods to their homes if conditions permit.

How did the current high inventory come into being?

In the second half of this year, some companies are struggling to retain workers because of low orders, resulting in a rising inventory of yarn. In addition, downstream weaving companies are having a hard time going on holiday earlier than upstream companies. On December 4, an official of an enterprise in Nantong, Jiangsu province, said that most local printing and dyeing enterprises will have a holiday from December until the Spring Festival next year. Some enterprises will also have a holiday from November, and the time to resume work is to be determined. It was the longest holiday year in local history. In previous years, November and December is a particularly busy time for printing and dyeing companies around the country, but this year, there are few people.

According to reports, the recent grey cloth market is generally stable, but manufacturers generally reflect no orders, inventory rising faster. On December 4, the person in charge of a factory in Yancheng, Zhejiang Province introduced that the current price of 10S denim is 8.85 yuan/meter, which is the same as the previous week; The quotation for 32S twill is 4.42 yuan/meter, which remains stable compared to the previous week. However, local businesses for inventory has been up to 12-13 days, individual more than 20 days. Weaving enterprises embarrassed burden, early holiday to concentrate on inventory became the only choice.

From the point of view of the whole industry chain, yarn market is characterized by high inventory, yarn prices are falling, enterprises have no profit, capital pressure; The price of weaving industry is stable, but there is no downstream consumption, life is more difficult. Therefore, it is difficult for textile mills to effectively destock.

Textile industry chain receipts and shipments improved

At a meeting of the Political Bureau of the CPC Central Committee held on December 6, the CPC called for "vigorously boosting market confidence" and "promoting the overall improvement of economic performance." It also stressed that next year, we will adhere to the priority of stability, seek progress while maintaining stability, continue to implement a proactive fiscal policy and a prudent monetary policy, strengthen coordination of various policies, optimize epidemic prevention and control measures, and form a joint force to promote high-quality development. Further tamp sufficient liquidity to meet the production needs of enterprises.

Under the stimulus of credit funds, policy support and the accelerated loosening of the epidemic prevention and control, the enthusiasm of textile and garment enterprises in production, order taking and financing has been restored.

As the epidemic prevention and control continues to loosen in many places across the country, the logistics and transportation of cotton, cotton yarn, grey cloth and clothing are gradually returning to normal, and the receipt and delivery of enterprises are improving, and the willingness to receive orders is rising.

According to the feedback of several large and medium-sized textile enterprises in Jiangsu, Zhejiang, Henan and other places, the inquiry and purchase of downstream terminal customers are picking up. Although short orders, small orders and urgent orders are still the main ones, the frequency of orders and communication have increased. In addition, Guangdong, Jiangsu and Zhejiang textile market traders before the Spring Festival a small amount of stockpiling enthusiasm also picked up slightly. At the same time, with the improvement of orders, the start-up of some areas has picked up. The comprehensive start-up of Jiangsu and Zhejiang ammunition has increased to 52%, the comprehensive start-up of Jiangsu and Zhejiang loom has increased to 47%, and the comprehensive start-up of Jiangsu and Zhejiang printing and dyeing has increased to 56%.

Polyester filament yarn

High inventory pressure to ease

Driven by the favorable downstream demand, the bearish expectations in the early stage of the downstream have been changed, and the speculative demand of some downstream has been stimulated, which makes the production and sales of polyester filament can continue to be good in stages. The industry is gradually destocking. At the beginning of the month, the average inventory of polyester filament has reached 36 days, which has reached the high point of nearly 5 years. Recent days of production and sales improved, to a certain extent to ease the industry's early high inventory pressure.

Since December, polyester double raw material fluctuated downward, the polymerization cost decreased, and polyester filament in the early cash flow loss is serious, manufacturers hesitate to sell at a low price, and the industry as a whole is at the lowest in recent years, undoubtedly aggravates the processing cost, so the manufacturer's quotation has been increased, most models of cash flow repair, FDY150D cash flow increased to 260 yuan/ton near.

Deepening transformation and upgrading to make development more resilient

Looking ahead to 2023, there are both opportunities and challenges in the textile industry.

Externally, in the context of the complex evolution of the international political situation and the increasing constraints of economic recovery such as high inflation, there are relatively high uncertainties in the prospects of the international market, intensified market competition and rising risks in the foreign trade environment, which will form a new round of tests on the ability of textile enterprises to resist risks.

From the domestic point of view, the textile industry still has the basic conditions to achieve stable development. China has embarked on a new journey to comprehensively build a modern socialist country with the victory of the Party's 20 major achievements. We will continue to effectively coordinate the results of epidemic prevention and control and economic and social development, ensure the long-term sound macroeconomic fundamentals, create a favorable environment for the stable operation of the textile industry chain, and there is still room for upgrading and development of the domestic market on the basis of its large capacity and scale.

In 2023, with the release of favorable macro policies for domestic real estate and epidemic prevention and control, it is expected that consumption will continue to increase and domestic demand will gradually increase. And overseas recession expectations are rising, and there are obvious signs of weakening consumption. The downstream textile industry will face great pressure to maintain a stable operation in 2023, deepen transformation and upgrading, improve development resilience, and resolve risks and challenges.

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