In order to survive, the 2020 knitting factory will not hesitate to cut prices and sell goods!

In order to survive, the 2020 knitting factory will not hesitate to cut prices and sell goods!

After the arrival of the new crown epidemic this year, we have been encouraging the owners of knitting factories: to continue to work hard, until the epidemic is over, the market will always be better! Now, July has arrived, and the market pressure that has been backlogged for more than half a year has not improved much: knitting factories have low profits, market goods are running slowly, and dyeing factories have no orders...

January outbreak and February wind,

March is fine to stay at home.

Sitting on the mountain in April is empty,

May is closed again.

In June, I was even more confused,

To be confirmed in July and August.

September and October enter winter again,

The whole play ends in November and February.

In the next year's research,

Not dying this year is considered a success.

The series of negative events described in the limericks above is like a vicious circle that is repeated one after another, accusing the knitting market of this year's difficult business!

In July, business was light, not to mention, the market prices began to be chaotic, low prices, lowest prices, lower prices... the information of large and small selling goods appeared in an endless stream. The low price of grey fabrics continued to impact the market, and the lower and lower customer prices. The knitting bosses are losing more and more.

The last stubbornness of the knitting factory: in order to survive, do not hesitate to lose costs!

"Before we went to a well-known knitting factory to get 50,000 meters of satin chiffon. The price was 3.65 yuan. This price is a bit cheaper compared to years ago, but I didn’t expect that their price dropped to 2.9 yuan/meter recently. The premise is to get enough 500,000 meters." Said a knitting boss in Shengze area.

The 50D satin chiffon of 2.9 yuan/meter is 100% at a loss. It is understood that the knitting factory stocked a batch of goods before, and the price was 3.8~4.0 yuan/meter. The original plan was to sell after the annual increase. But I did not expect that the original plan was disrupted by the epidemic. Now the large amount of inventory in the warehouse is difficult to digest and can only be sold at low prices. According to the current price of raw materials, if you sell at 3.5 yuan/meter, you will not lose money. Selling at a price of 3.65 yuan/meter can make a profit of 0.15 yuan/meter, but after throwing it for a while, it starts to be unable to sell, so the price is lowered again, from the original 3.65 yuan/meter directly to 2.9 yuan/meter , A drop of 0.75 yuan/meter, even the capital cannot be kept, but the premise is to get enough 500,000 meters.

Although the knitting factory sells inventory at a loss, it looks like a "loss" on the surface, but it does not suffer a big loss in a practical sense. The meaning of selling goods is a large number of low prices. Clearing inventory is the most important thing to sell. The fundamental meaning is that if the inventory is cleared out, although the funds have been reduced, at least there is still an account. Although these fabrics do not contain spandex yarn, it will not be particularly relevant for a year or two, but it will take a long time. How much there will be damage and depreciation, and the value will be lower than the current loss, and it is not a special situation. I believe that customers will not choose to store inventory for too long!

Some people say: "As long as the price is low, the inventory can be cleared!" However, this sentence is no longer suitable for the current knitwear market. The price of this 50D satin chiffon is 2.9 yuan/meter, and you can’t even dream of it. Who won't take such a big bargain?

However, 500,000 meters is indeed a bit unbearable for some knitwear manufacturers with high inventories and small capital flows. And some types of grey fabrics, even if they are sold, no one cares about them. Some manufacturers advertise in the WeChat circle to sell goods, but many days have passed, the advertisements are still posted every day, and the inventory has not changed at all.

Throwing goods to inventory is actually a bad behavior that damages the industry, but the knitting factory is also forced to sell goods. Obviously, the knitting factory does not hesitate to lose costs in order to survive.

The demand boost is not good, and the price of polyester is hard to see rise!

From the perspective of demand, the increase in consumption is not optimistic, and there is a risk of decline. According to data from the General Administration of Customs, the export of knitwear including masks in May increased by 77.34% year-on-year, but the export of clothing fell by 26.93% year-on-year. The data for the above April were 56.2% and 27.1%, which means that it was compared with April. By comparison, clothing exports in May still did not improve. But now in the low season of consumption, there is still a shortage of orders downstream of the terminal. At present, the stock of grey fabrics has exceeded the highest level in the past four years, and the terminal loom has continued to reduce the operating rate for four weeks.

As polyester still maintains a high operating rate of about 90%, pressure is gradually transmitted to the upstream when downstream demand is declining, polyester transactions are light, and finished product inventories have increased for two consecutive weeks. So is there still room for the polyester load to continue to rise in the later period? The average output of polyester in the past two months has reached 4.57 million tons, a year-on-year growth rate close to 10%, which is basically the same as the average growth rate in the past three years.

We believe that with global knitwear consumption declining and many well-known brands being exposed to bankruptcy or withdrawing from the market, it is not easy to achieve the current level of growth, basically fulfilling expectations for consumption recovery. However, the reality is that terminal demand has not yet returned to the right track. Under the effect of terminal inventory pressure transmission, there is a risk of correction in the supply of polyester products.

The market is difficult to recover before the end of the year, but the inventory is no longer piled up! This year, the knitting man is in trouble!

I still remember that at the beginning of August last year, the editor was chatting with a friend who was running a business in the market. He complained to the editor:

Due to the early arrival of the off-season, knitwear manufacturers that produce conventional products such as pongee, polyester taffeta, and imitation silk have generally encountered high inventory problems. Some large factories have inventories as high as tens of millions of meters, which is far from the beginning of the market. There is still a month left in September, and the market for 2019 is basically over.

This year, due to the impact of the epidemic, this time has been advanced to June or even earlier.

The law of failure, and "all the way up" inventory

According to the normal market conditions in previous years, the knitting market generally has two peak seasons:

●The first section starts in March and generally ends in early June. The main products are spring and summer fabrics;

●The second segment starts in September and generally ends in November. The main products are autumn and winter fabrics.

And each time at the beginning of the peak season, the number of orders is the largest. Therefore, there have been sayings of "Golden Three Silver Four" and "Golden Nine Silver Ten". However, this statement does not seem to be true in the past two years.

From 2017 on the average inventory of knitting manufacturers in Jiangsu and Zhejiang, we can clearly see:

●From April 2018, although the inventory of weaving companies is constantly fluctuating, the overall range is stable. The inventory has increased within a certain period of time. After a period of time, it will fall back to the original position when the peak season is reached;

●But after April 2018, the situation has undergone tremendous changes. Although weaving stocks have risen and fallen over time, the decline has not kept up with the rise, which eventually led to higher and higher inventories. .

Frequent promotions and rejections, but still can’t sell

In a competitive market, the more products in the market, the more intense the competition, the lower the price of the product, and even companies may sell at a loss in order to survive. This is a truth that business people understand.

During this time, the knitting market showed such a trend.

Take the most common polyester taffeta in the market as an example. Because of its low cost, low threshold, relatively easy storage, and high demand, polyester taffeta has become a stop loss for many companies when the market lacks popular fabrics. Some time ago, there was also news that some knitwear manufacturers used imported Tsudakoma looms to produce polyester taffeta.

And this has caused the price of polyester taffeta to plummet. The current market price is less than 1 yuan per meter, and the machine rate has even become a negative number. Even at such a "loss price", the inventory of most knitwear manufacturers still only rises.

If the market picks up, or next year, the biggest enemy is time!

A person in charge of a knitwear manufacturing company that specializes in four-way stretch said that the current market is not good, but there are advantages and disadvantages, and the low raw material prices are unprecedented. In fact, everyone knows that the market will get better. As long as the epidemic is brought under control, orders will surely rebound. At that time, the prices of raw materials, cloth and dyeing fees will definitely increase.

But it is not easy to wait for the market to pick up. In the survey of the impact of the new crown epidemic made by the International Textile Federation on the members, affiliates and associations of the International Textile Federation, we can see that 20% of knitwear manufacturers believe that it will not be able to recover to the pre-crisis level until the fourth quarter of 2020. However, those who think it will recover in the first and second quarters of 2021 reached 23% and 21% respectively.

Even with the most optimistic estimate and the time for stocking up in advance, such a sluggish market will last at least three months, and how much inventory will grow before the market improves, and whether the capital chain can be maintained It becomes a huge challenge for knitwear manufacturers.

Therefore, for knitting companies, the biggest enemy is nothing but time!