Shaoxing: Costs are high, fabric companies suffer in pain

In the face of soaring cotton prices, the main affected enterprises are export-oriented fabric companies and upstream cotton yarn producers. The domestic-selling fabric companies that mainly supply fabrics for domestic brand apparel companies are not affected much.

Shaoxing is one of China's most famous textile and apparel industry clusters. It mainly exports various kinds of fabrics to countries and regions such as Europe, the United States, the Middle East, and Japan. The situation of Shaoxing fabric companies can be described as a microcosm of the entire industry.

The increase in the price of fabrics and other materials has been the most direct effect of the increase in cotton yarn prices on fabric companies.

Before the beginning of July, the price of grey fabrics was relatively normal. Taking 24×24×7260 cotton grey fabric as an example, the price was about RMB 5 per meter at that time, the price rose to about RMB 5.8 per meter in August, and it fell back slightly to about RMB 5.5 per meter in late August. Since the middle of the month, it has been soaring. At the end of October, the price has risen to 6.5-6.8 yuan per meter. Compared with July, it has risen by 30%-36%. It is still rising.

Lu Senbiao, general manager of Shaoxing County Zhaofeng Fabric Co., Ltd., said with emotion: “We are the biggest victims.” Zhang Guoping, Shenzhen Dayang’s textile purchaser, also said with emotion: “If cotton prices rise again, companies can’t afford it. We don’t Method."

When the cotton price is insane, many companies that previously used the production of cotton fabrics began to use chemical fiber materials instead of cotton. As a result, the price of chemical fiber raw materials has also been driven up. Polyester, viscose, and other raw materials have risen to varying degrees this year. However, the increase in the price of cotton is still within the scope of the enterprise.

Taking viscose staple fiber as an example, according to the “China·Keqiao Textile Index” monitoring, on March 8th, the mainstream quoted price of viscose staple fiber 1.5D is about 19,900 yuan/ton, and on March 12th, the mainstream quoted price is 20,100 to 20,200 yuan. About / ton, to the October 18 market mainstream quotes have risen to about 22500 ~ 22600 yuan / ton, October 20 viscose staple fiber market price increased 500 yuan / ton, 1.5D market mainstream quoted at 23000 to 23200 yuan Around / ton, expected by the end of November rose to 25,000 yuan / ton. In the past 8 months, prices have increased by 16.6%.

Zhang Guoping deeply felt about this, let him feel the most obvious is that when he orders to the chemical fiber fabric factory, the general price increase has reached 2 yuan / meter. In May, the price of a fabric that he fancy at a fabric factory was RMB 17/m. At the time of real order, the price rose to RMB 19/m. "It makes us not to operate," he said.

One kind of cotton price was very unstable one day, which led to the general increase in the prices of related raw materials. This made it impossible for the prices of various types of products on the industrial Chain such as grey fabrics and fabrics to stabilize. This turmoil and instability in the market conditions have squeezed the fabric companies' limited profit margins.

If the price quoted by a company on October 20th is 5 yuan/m, when the customer picks up the goods after 1 month, it is very likely that the real price should be 5.5 yuan/m according to the growth rate of cotton. In accordance with the contract price of 5 yuan / meter payment.

As a result, the profits of fabric companies are lost. And such losses can only be borne by the companies themselves most of the time. As for the price increase, it is only possible to achieve the next single business.

Enterprises do not dare to quote easily, receive orders and see the skyrocketing price of cotton and turbulent stocks. As a result, many companies are currently in a situation where they do not dare to make quotations easily when they ask, or even dare to take orders. Companies generally reflect that when customers look at a certain fabric to ask for price, they simply cannot dare to quote it easily, because it is impossible to judge the extent to which the price will rise when the customer actually places an order for a few days. Even if orders are received, they are often based on short orders.

More than 80% of the products produced by Zhejiang Honglanlan Textile Printing and Dyeing Co., Ltd. are exported to Europe, the United States and the Middle East. Although the current production of digital printing fabrics is the mainstream of pure cotton fabrics, there are still some pure cotton products in the products. “Although the overall impact is not great, it still has some impact.” Huang Xinming, deputy general manager of Zhejiang Honglanlan Textile Printing and Dyeing Co., Ltd. analyzed.

Red, green and blue need to buy grey fabrics from upstream manufacturers. The price of grey fabrics is not stable. The price is very high every day. The volatility is very large. Sometimes, even if the money is in the hand, the sources cannot obtain it.

In this way, the new customers' orders for cotton, red, green, and blue do not dare to pick up, but rather take a wait-and-see attitude. Those who dare to take over are just some old customers' orders. Huang Xinming stated that the order of red, green, and blue of the next pure cotton is basically not answered. In the face of crazy cotton prices, Red Green Blue would rather give up this one.

Similarly, at the site of the Keqiao Autumn Fair held from October 25th to 28th, a Middle Eastern customer wanted to purchase fabrics of about 600 meters and dress for 50 people. Taking into account the unstable market conditions, and the order is too small, Zhejiang Baofang Printing and Dyeing Co., Ltd. had to give up the order.

Lu Senbiao, general manager of Shaoxing County Zhaofeng County, which produces velveteen fabrics for garments, also said that if cotton continues to be mad like this, it is likely that companies will abandon velveteen fabrics.

Cotton fabrics and cotton yarn companies are cutting production and discontinuing cotton prices. They are “crazy”. Even the most traumatized are the small companies that use pure cotton as their main raw material, including fabric companies and cotton yarn manufacturers.

A small local fabric company in Shaoxing is positioned as a “professional cotton supplier” and its various cotton fabric products are mainly exported to India, Iran and other Middle East regions.

In October of last year, its business was still very hot and the orders were quite sufficient. The products were shipped in the entire cabinet. However, in October this year, the customers did not decrease, and the demand of these foreign customers did not decrease, but this The company’s goods are no longer available, and they cannot be supplied. Businesses cannot basically do it.

When the business was booming last year, the merchandisers had a very large amount of business. They basically didn't see anyone in the company during the month and they all went out with the bills. But this year, these mercenaries were clearly idle and basically spent all day. In the company. When the business was good, the company had about 23 employees, but with the escalating price of cotton, the business department, printing and dyeing department, production department and other departments had left one after another. At present, there are only a dozen or so people left.

When the business was booming last year, all the machines in the company were rumbling and working overtime. They wanted to add some new machines. But in October this year, the factory is still this factory, and the machines are still those machines. Only the entire factory was deserted. Those machines stopped there cold and there was no more roaring in the past.

When the business was booming last year, the company’s monthly sales volume was about 20 yuan. However, this year, the seven or eight single-month bills in each month in the first ten months of the year are already very good. At present, this company has already stopped production.

The encounter with this company is not a single case. It is understood that many small-sized cotton fabric companies have similar experience. Moreover, in the area of ​​Jiangsu and Zhejiang, many small cotton mills are not doing business and have stopped work. Because of this crazy price increase, they couldn't afford it, and even if they made the grey cloth, they couldn't be sold according to their expectations.

"Stop doing business, this phenomenon is now almost normal." A company official said with emotion.

According to a number of companies, as cotton prices have soared after the “11” holiday, many small cotton yarn manufacturers or small fabric companies in Jiangsu and Zhejiang have extended their holidays and cut production or even stop production, even if they are big fabric companies or cotton yarn companies. There is also a reduction in production.