This year’s textile market can be said to be: one wave after another! The RMB continues to appreciate, the price of raw materials soars, freight forwarders have no goods to transport, delivery dates are delayed, and products are not in season… Whether it is a “black swan” or a “white swan” in the market, it has disrupted the plans of operators. It has also caused the profits of textile companies to fall again and again. Many textile bosses said: It is difficult to do business these days!
One container lost RMB 70,000 just because the cost increased!
Recently, the raw materials in the market have been rising continuously, especially in the polyester filament market. After entering September, mainstream manufacturers have raised their product quotations. From FDY to POY, all price increases have been staged. Some products in high demand have even increased by two yuan a day. For the third time or three times, the market was closed and reluctant to sell, waiting for the price to rise.
As can be seen from the above table, polyester filament, the mainstream raw material for chemical fiber fabrics, can be said to be “all over the market” in the past month. Products with tight supply in the market, such as fine denier FDY, have increased by around 1,000 yuan/ton. The rise in raw materials is quite helpless for weaving manufacturers.
“Although products such as nylon fabrics and gallbladder fabrics are selling well on the market now, and the prices are rising day by day, the price of raw materials is rising faster. In fact, the profits of gray fabrics are not as good as market rumors!” Salesman Xiao Shen said.
We calculate based on theory that for every 1,000 yuan increase in raw materials, the cost of the most cost-effective polyester taffeta will increase by 1 cent. If the fabric uses more silk, the cost will be greater. Throughout this month, in the gray fabric market, except for some in-demand products such as polyester taffeta, pongee, and nylon, the prices of most products such as suede, peach skin, gabardine, etc. have not increased. Some products even experienced negative price drops.
“Recently, the price of raw materials has increased so much that I don’t even dare to take orders. I just put out a cabinet and lost 70,000 yuan, just because of the cost.” said Mr. Li of a trading company in Shengze.
Profits are getting smaller and smaller, and dyeing fees will continue to rise!
In the second half of this year, the printing and dyeing process has become the focus of many textile people. Faced with frequent price adjustments by dyeing factories, traders are complaining!
▲Recently, Jiashan No. 1 Dyeing Factory issued another price increase notice, clarifying that starting from the 12th, the price of black will increase by 0.03 yuan/meter.
“Now I am almost driven crazy by the dyeing factory’s price increase, from 0.71 yuan to 0.86 yuan. It was not exceeding the cost, but now it is beyond the cost.” Mr. Jin from Shengze area told the editor.
For example, 3 grams of dye used to cost 5 cents, but now 5 cents can only buy 2 grams of dye. In the past, 2-3 grams of dye was not considered excessive cost, but now more than 2 grams is considered excessive cost. “Profits have been suppressed to a very low level now. With dyeing fees rising so much, many orders cannot be accepted. Moreover, dyeing factories are now shut down and production is restricted, and goods cannot be shipped out!”
According to statistics, many dyeing factories have recently increased their dyeing fees by about 10% due to factors such as rising dyes and environmental protection costs. For traders who make conventional fabrics, profits are not high in the first place. A lot of pressure. Coupled with issues such as sewage discharge indicators, production capacity is limited, and delivery times are about 20 days. When companies receive orders, they do not know how to negotiate with downstream companies.
The loss of 340 yuan per ton is all caused by the exchange rate!
What makes foreign trade people even more dumbfounded is that while the prices of raw materials are soaring, the appreciation of the RMB has made them even more tired and unhappy.
Since July, the RMB exchange rate against the U.S. dollar has risen rapidly, breaking through three integer levels of 6.8, 6.7, and 6.6 in succession. On September 4, the onshore RMB once exceeded the 6.55 mark. The weakening of the US dollar has prompted the RMB exchange rate to continue to rise.
The person in charge of a foreign trade company said: The exchange rate for our previous orders was 6.85, but now it is 6.55. Calculated based on 30,000 USD for a high container, the loss is 8,100, or about 340 yuan per ton. But even if you know you are losing money, you still have to do it, and you need to maintain customers.
The falling dollar exchange rate hit a 16-month low! According to analysis by industry insiders, assuming that a foreign trade freight forwarding company has a receivable worth one million US dollars, today the loss will be as much as 430,000 yuan just because of exchange rate losses!
“Although the RMB exchange rate fluctuated in the past, the amplitude was not as large as this period. Many of our orders were signed a month ago and were settled in US dollars. Now that raw materials have increased and the US dollar has depreciated, it is still difficult to complete one order. We are lucky to be able to stay within the cost line.” said Mr. Ma from the finished product shopping area, “So now when we negotiate prices with European and American customers, we don’t know how to quote prices.”
Gold 9 and Silver 10, make timely market response measures and psychological preparations
Raw materials, dyeing fees, exchange rates… all are like a knife, cutting the originally small profits into smaller and smaller portions. Although the overall market is currently “rising”, behind this seemingly “prosperous”, Hiding Bu LaoOur helplessness. July and August, which were supposed to be the off-season for textiles, were “not off-season” and were very similar to the market situation at the end of last year. Although the transaction volume and inventory were better than the same period last year, many traders were faced with rising market prices. It can be said that “a dumb person can eat Coptis chinensis and cannot tell the pain”.
Faced with the current market situation, many business leaders said that whether it is raw materials, dyeing fees or labor, price increases will become normal. However, they are still skeptical about whether prices can be successfully transmitted to downstream terminals. The price increase of upstream raw materials, The downstream acceptance of clothing and home textiles is not strong, which puts traders in the midstream in a dilemma. Profits are also compressed layer by layer, leaving little left. Therefore, as market demand continues to improve, merchants must also take market response measures in a timely manner, especially in terms of receivables, and be more cautious to survive this “painful period”!
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