After the end of the National Day holiday, suddenly found that the market has become unfamiliar, before the festival is still a dead scene, after the festival has become hot.

The raw materials are soaring, the dyestuffs are bursting, the freight is tight... The textile people are busy and happy. Its really not easy to see such a situation in 2020 when the epidemic is raging.

Demand or hype? This is a problem

Demand?

The current market outbreak is not without foreshadowing. The domestic strict anti epidemic measures have controlled the domestic epidemic in a very small range, and the domestic demand for textiles has basically returned to the normal level before the epidemic;

In terms of foreign trade, it can be seen from the previous news about the return of Indian orders that some countries in Southeast Asia and India have been unable to complete the international division of textiles due to the impact of the epidemic, and have been unable to deliver goods with quality and quantity on time. Although the demand for foreign trade has shrunk, some rigid demand is still there, so some orders naturally flow to China.

However, this kind of backflow did not start in October. As early as the first half of the year, when the international epidemic began to break out, the textile industry in Southeast Asia had already suffered a devastating blow. It was only because of the overall increase in the number of orders in the "golden nine silver ten" market that this situation came into the publics view.

However, when the hot market lasted for more than half a month, there were some different voices in the market.

Hype?

Mr. Yang, a fabric manufacturer who has been working in textile enterprises for more than 20 years, said that the current market may have a very heavy speculation component, and the terminal demand can not reach this level at all. Therefore, the current hot situation is unsustainable and will soon fade down. Therefore, Mr. Yangs operation is very cautious whether it is purchasing raw materials or receiving orders.

After experiencing overcapacity in 2019 and COVID-19 in 2020, textile people generally used to "take one step and look at the three step". Now, in the most prosperous market of the year, there are many textile workers who hold similar views with Mr. Yang, and this can be seen from polyester production and marketing.

According to the data monitoring of China silk capital.com, after entering late October, except for October 21, the average production and sales of polyester filament of polyester factories in Jiangsu and Zhejiang province changed, and the momentum of continuous over 100 in the previous week dropped to about 70%. On the one hand, it is because the replenishment of weaving enterprises has basically ended, and on the other hand, it is also because the cloth owners are becoming more and more cautious in purchasing raw materials.

Why hype?

Epidemic rages, cloth price doubled

Before the hot market, all kinds of grey fabric products can be seen everywhere, so that the price of grey fabric is lower than the market price or even lower than the cost price. Take danbu, which is very hot recently. The lowest selling price of 380t polyester spinning has been as low as 1.3 yuan / m. after October, with the market booming, the price began to soar. At present, it has reached nearly 2.4 yuan / m, and the price has almost doubled.

Novel coronavirus pneumonia has been diagnosed by more than 42 million 400 thousand people since October 24th, and the demand for the new crown pneumonia has not been fully restored.

Although demand will drive up prices, it is difficult for the demand that has not fully recovered to double the price of grey cloth. Many traders in the market also hoard goods based on the psychology of buying up but not buying down. Therefore, the reason for the current hot market is not so much the recovery of demand as the transfer of inventory.

How to keep foreign orders? Its impossible and unnecessary

There is also a hot topic of speculation recently, that is, foreign orders flowing to China. There is a voice in the market that as long as we keep these orders and dont let them flow back, the market will be on fire all the time, but its impossible.

Although the global textile industry is constantly transferring from China to Southeast Asian countries and India, it has no other advantages except labor cost, so most of the products produced at this stage are relatively low-end products.

Judging from this logic, most of the products included in the orders flowing into China from foreign markets have been basically eliminated by us, with low technology content and stronger sensitivity to labor costs.

At ordinary times, domestic textile enterprises do not see the profit of this part of orders, but because of the global demand shrinking, these orders become the "life-saving straw" of consumption of inventory and production capacity, so they become the hot cakes.

Therefore, once the epidemic situation improves, this part of the list is bound to flow back. There is no way or need to stay in China.

afterword

For textile people, last month they were still thinking about how to survive. This months market suddenly became like this, which really caught people off guard. However, whether it is inventory reduction or order increase, it is a good thing at this stage.

Therefore, make good use of the present and face the future cautiously. Anyway, the most difficult time has passed.