The knitting factory has over 40% off. How long will it take for the hard times?

The knitting factory has over 40% off. How long will it take for the hard times?


        According to the data released by the General Administration of Customs recently, the export value of China's knitwear and apparel in June was US$29.03 billion, an increase of 17.8% year-on-year; of which, the export value of knitwear was US$16.16 billion, an increase of 56.7% year-on-year and a decrease of 21.8% month-on-month; the export of apparel and clothing accessories The amount was US$12.87 billion, a year-on-year decrease of 10.2% and a month-on-month increase of 44.6%.

   Due to the long chain of the cotton spinning industry and the unfavorable downstream consumption, the industry's recovery has been slowly affected. At present, the operation of the upstream and downstream knitting factory still faces many difficulties.

  According to the survey of the operation of some knitting companies, there was indeed a short-term upsurge of orders in May, and the shipment of gauze products also increased rapidly. From the source of order taking, it was mainly domestic orders. However, the duration of this "craze" is not long. From the middle and late June, the pace of taking orders gradually slowed down. With the grey cloth and cotton yarn inventory picking up again, the knitting factory profit promotion is on the agenda again. Especially since this week, due to insufficient upside momentum of Zheng Mian Futures, knitting factory has increased the price reduction range and the scope of price reduction due to the lack of order support and lack of cost promotion. For some yarn varieties, in less than a week, the price has been reduced by about 500 yuan/ton, and enterprises have a strong sense of destocking and guaranteeing funds.

In the face of multiple pressures on the operation of all parties in the market, whether in knitwear manufacturers or cotton trading enterprises, some operators flexibly adjust their business methods, or switch from foreign trade to domestic sales, or from general knitwear to medical protective products, or from unilateral spot There are many ways to purchase and sell, such as arbitrage and arbitrage, to survive.

  Gray cloth: Enterprises with a small order have a large number of holidays

  Recently, due to low orders and operating losses, many knitting factories are going on holiday. On the 16th, a person in charge of a sweater manufacturer in Shaoxing, Zhejiang stated that due to the epidemic situation, knitting manufacturers could not receive orders, and the production tasks were seriously insufficient. During the holidays, ordinary employees only receive a basic salary of 1800 yuan/month, and they will not be paid until one month after resuming work.

  According to the person in charge, on the one hand, knitting manufacturers are worried that workers will not return to work after the holiday, which is the original intention of not paying the wages in a timely manner; on the other hand, the enterprise does not get so much money at once.

   It is understood that due to the small number of orders, over 40% of the enterprises in Zhejiang Province have ceased production and vacations, and some enterprises that have not been on vacation are also struggling.

On the 16th, the person in charge of Zhejiang knitwear manufacturers said that they had just received an order, but after calculating the cost, the average loss was 0.2 yuan/meter. However, in order to maintain the normal production of the factory and protect the workers from being lost, they can only take it with pain. This year is a year of catastrophe, and the days of the factories are not easy. Whether it is taking orders at a loss or taking holidays to avoid risks, it is helpless.

   Many knitting companies' financial reports fell sharply

   Recently, a number of knitting companies issued a performance forecast for the first half of 2020: Jilin Chemical Fiber is expected to lose 70 million to 90 million yuan, with a profit of 70.755 million yuan in the same period last year, which turned from profit to loss in the same period last year. Huafu Fashion Co., Ltd., the world's largest supplier and manufacturer of dyed yarn, is expected to report a net profit attributable to shareholders of listed companies during the reporting period compared with 351 million yuan in the same period of the previous year, with a loss of 120 million to 160 million yuan. yuan. Lutai Knitting Co., Ltd. expects that the net profit attributable to shareholders of the listed company during the reporting period will be only 120 million to 160 million yuan, a decrease of 70.83%-61.11% compared with 411 million yuan in the same period last year.

     Based on its unaudited management accounts, Weiqiao Knitting Co., Ltd. expects that the group's interim results for the six months ended June 30, 2020 will be significantly lower than the same period in 2019.

   Then, when will the order pick up? There is general lack of confidence in the industry. Many industry believe that for the current knitting season in July, it will take a long time before the recovery of foreign trade orders. 

      Nowadays, the uncertain and unstable factors facing the development of my country's foreign trade have increased remarkably, adding to the impact of Sino-US economic and trade frictions, the situation of foreign trade exports in the second half of the year is still complicated and grim. Knitters must control production costs. In the post-epidemic era, as long as the cash flow is guaranteed, there is still a chance to reverse the wind.