"The past few months have not been easy for textile companies." He, who runs a textile company in Dongguan, told 21st Century Business Herald that although power rationing measures have been relaxed, the double control of energy consumption and the rising price of raw materials have still had an impact on businesses.
Recently, data released by China National Textile and Apparel Association showed that the climate index of China's textile industry in the third quarter was 58.7, down 6.7 points from the second quarter. The decline of the textile industry in the third quarter is mainly due to the complex and severe international environment, the impact of the domestic epidemic situation, as well as the continuous rise of raw material prices, energy and other factors.
Reporters learned that under the influence of various factors, many domestic textile and garment enterprises are facing the double pressure of declining orders and declining profits.
New orders fell in the third quarter
In September this year, under the influence of energy shortage and energy consumption control policy, a number of provinces in China have issued a series of power cuts, including Guangdong, Jiangsu, Zhejiang and other large textile provinces, which has affected many textile enterprises to varying degrees.
In October, some big textile provinces continued to be limited by power supply, and enterprises were not able to open the probability. The terminal demand did not increase significantly compared with last month, and the overall market sales remained poor.
"I thought the e-commerce carnival such as Double 11 would stimulate the performance of enterprises, but this year's Double 11 orders are not as usual." Ganzhou a garment enterprise chief Mr. Xie to the 21st century economic report reporters said.
For textile and garment enterprises, a series of factors have disrupted the industry's preparation for production in peak season. The ex-factory price of some products has risen, and the delivery cycle has been prolonged. The pressure of stock shortage has begun to be transmitted through the supply chain. Raw materials skyrocketing, grey cloth, fabric, printing and dyeing, etc., the upstream of the textile market has a rising tide.
Mr. Weng, head of a textile company in Zhejiang, told the 21st Century Business Herald that since the end of October, local power restrictions have been relaxed and production capacity has gradually recovered. "But while capacity is coming up now, orders are not picking up dramatically."
In the view of the industry, the policy adjustment did not boost the construction of a large increase in the short term, especially the price of chemical fiber raw materials has risen all the way, grey cloth profit is relatively limited, and even some orders have been missed, part of the factory production enthusiasm is difficult to improve.
In October 2021, China National Textile And Apparel Association (CNTAC) carried out a survey on the operating status of textile enterprises. According to the calculation, the prosperity index of China's textile industry in the third quarter was 58.7, 6.7 points lower than the second quarter.
China National Textile And Apparel Association (CNTAC) pointed out that according to estimates, the new order index of China's textile industry in the third quarter of 2021 was 61.5, down 8.6 points compared with the second quarter, but the market demand is still in the growth range. The epidemic occurred from multiple sources in China, affecting people's travel and consumption to some extent. Weak demand in the international market and rising transportation costs; This, combined with a higher base last year, also affected new order growth. In addition, since the middle of May, a large area of staggered peak power consumption in South China, the power supply situation in some regions is tense, leading to enterprises dare not accept orders.
The end market is over
Terminal textile market with the shopping section of the heat in the past, "Christmas" and "12-12 orders have been produced, fewer new orders at present, and the order is coincided with the electricity limit production, social inventory to change significantly, at present, according to a data monitoring and silk net cloth weaving enterprise inventory as a whole is about 28.8%. Inventory, should have let the market grey cloth prices rise, and now grey cloth prices are slowly falling down, because the current market is not too positive.
Under such market, on the procurement of raw materials. Textile enterprises generally cautious attitude, and to the promotion, buy a little time, and the early stage of the stock up the raw material is enough for the terminal textile enterprises digested slowly, quietly waiting for the promotion of replenish onr's stock, but as year-end approaches, many do market goods manufacturers began to focus on stock, to start to prepare for next year's production.
Demand in the short term, the upstream ultimately depends on the change of the terminal market, according to the usual rule, in the early stage of the Spring Festival, there will be a market appear, especially at this point in time, foreign trade orders should also usher in a market, but now with overseas before the outbreak, container to rob, and cancel the pratt & Whitney policy of our country, there are 32 countries foreign trade market prospects uncertain, If this year before the end of the market can not come as scheduled, so not easy in the production limit to the inventory will base high, the market will once again fall into a vicious circle. However, from the perspective of the market prosperity index of the Ministry of Commerce of Silk City Network, in the fourth quarter, the market broke the continuous decline in the second and third quarters, and it is estimated that the market will continue to rise in the fourth quarter.
Textile and garment enterprises operate in small profit
The profitability of China's textile industry declined in the third quarter of 2021 compared with the second quarter, according to data released by the China National Textile and Apparel Association. According to the survey, 38.9% of textile enterprises said that the third quarter than the second quarter profit increase, this proportion than the second quarter survey results down 11.1 percentage points; 29.2% of textile companies reported lower profits than in the second quarter, up 13.4 percentage points from the second quarter survey.
As the prices of raw materials, cotton and fabric have skyrocketed, textile and garment exports are in a dilemma.
From the perspective of cotton prices, in October, influenced by the rising prices of bulk commodity markets and other factors, cotton prices at home and abroad rose sharply to a new high in nearly 10 years, and fell in late October. During the month, the cotton picking and purchasing were carried out on a large scale, and the purchase price of seed cotton rose sharply, leading to a higher sales price of new cotton.
Tian Guoping, general manager of Ganzhou Huasi Garments Co., LTD., said, "Orders have dropped significantly since last year and have picked up in recent months, but raw material prices have generally risen by 30 percent, and rising costs have severely squeezed our profits."
According to CNTAC, the biggest problems facing enterprises in export are lack of international orders and rising shipping costs. 48.1% of the sample enterprises listed lack of international orders as a major problem, while 20.0% of the sample enterprises listed rising shipping costs as a major problem.
In addition, due to the impact of the epidemic, port congestion and container shortage in many foreign countries have not only led to a significant increase in transportation costs, but also prolonged transportation cycle. Once the delivery cannot be made on time, orders will be at risk of cancellation.
Industry insiders said that for many small and medium-sized enterprises, in the procurement of raw materials and product prices in the bargaining power is not strong, passively accept the price of raw materials at the same time, unable to pass on the cost pressure, most of the cost needs to be digested by the enterprise itself, profits will inevitably be affected.
Based on their own production and operation status and feelings about the market, some enterprises have made industry forecasts for the fourth quarter of 2021. On the whole, the enterprise of the fourth quarter of the industry boom judgment is more cautious, it is generally believed that the fourth quarter running speed and the third quarter flat. Specifically, expected fourth quarter, production will maintain smooth operation; New orders may increase slightly, market demand is expected to expand; Raw material prices may fall from high levels