One end is increasing prices and the other is reducing prices, and both the upstream and downstream ends are squeezed: How can fabric companies survive through the cracks?

One end is increasing prices and the other is reducing prices, and both the upstream and downstream ends are squeezed: How can fabric companies survive through the cracks?

Recently, fabric companies are facing severe challenges.

The prices of upstream raw materials continue to rise, viscose fiber, polyester yarn, The prices of spandex, nylon, dyes, etc. have all increased significantly. Among them, the price of 40D spandex has risen to over 70,000 yuan/ton, an increase of 86% since the beginning of this year, and an increase of more than 150% compared with the same period last year.

However, fabric prices are falling. According to China Customs HS 8-digit code statistics, from January to May, the average unit price of my country’s exports of eight major categories of printing and dyeing products was 0.98 US dollars/meter, a year-on-year decrease of 0.53%. Compared with the same period in 2019, its average export unit price growth rate was -4.81%.

With prices rising on one end and falling on the other, how fabric companies can “survive in the cracks” has become a big test that they must face now.

It is difficult for fabric factories to achieve price transmission

Recently, the price of textile raw materials has increased several times. In addition to the rising prices of raw materials such as spandex, the price of polyester filament has also begun to fall first and then rise. Relevant platform monitoring shows that recently, the mainstream negotiated price in the POY150D product market is 7,850 yuan/ton, a month-on-month increase of 325 yuan/ton; the FDY150D price is 8,025 yuan/ton, a month-on-month increase of 250 yuan/ton; the DTY150D price is 9,200 yuan/ton, a month-on-month increase. Increased by 400 yuan/ton.

Faced with the fierce price increase of raw materials, fabric companies have issued very few price increase letters. The relevant person in charge of the Suzhou ShengzeSilk chemical fiber index monitoring and release platform pointed out that although the price increase of raw materials after the Spring Festival has recently returned, fabric companies in the market are still raising prices. few.

The China·Keqiao Textile Index released on July 19 also shows that in the near future, the price of clothing fabrics The index fell slightly. The transaction prices and volumes of pure cotton, polyester, polyester-cotton, polyester-nylon, polyester-span, viscose, nylon, and hemp-viscose fabrics fell in varying amounts, affecting the overall price index of clothing fabrics. There is a decline.

“It is difficult for prices to rise because customers do not accept it.” Li Changchun, manager of Suzhou Wujiang Weihua Textile Co., Ltd., revealed that the company’s current number of orders is basically the same as before the epidemic, but profits have declined significantly. “Before, We are too lazy to make orders that make only a dime, but now everyone is rushing to make orders that only make a few cents.”

Yang Jiandong, general manager of Haimen Youyuan Textile Co., Ltd., also said helplessly: “Although the orders are not small, it is getting more and more difficult to make money. Since the second half of last year, cotton prices have begun to rise rapidly, and yarn prices have also risen. Taking the gray fabrics we produce as an example, the current cost has generally increased by 20% to 30%.”

“You cannot adjust prices casually, otherwise the negotiation will collapse if the negotiation fails.” This has become the consensus of many interviewed fabric companies, especially the heads of small and medium-sized enterprises. In this “beating the drum and spreading flowers” type of price increase started by the upstream, fabric companies are helplessly digesting more rising cost pressure.

The wave of price increases affects the entire industry chain

It cannot be denied that although some fabric companies are in an embarrassing situation-the orders are obviously losing money, but they still continue to take orders. A person in charge of a fabric company who did not want to be named told a reporter from China Textile News: “This is mainly to dilute the fixed cost expenditure in the early stage and to retain workers.” He said that it is difficult to recruit workers now. If the machine is shut down, Enterprises also need to spend more funds to subsidize workers’ wages, which will result in even greater losses. The person in charge said frankly: “In order to prevent the factory’s equipment from being idle too much, companies have to bite the bullet even if they lose a lot of orders. Only if the capacity utilization rate reaches 70% to 80% can companies cut off some of the companies that are losing too much.” Order.”

Yang Jiandong believes that fabric companies will inevitably be affected by the soaring prices of textile raw materials. The pressure of rising prices for cotton, cotton yarn, polyester-cotton yarn, etc. will eventually need to be shared by multiple parties such as fabric companies and clothing buyers. It cannot be solved by a large price increase in one link alone. , all parties need to make concessions.

Faced with this booming wave of price increases, fabric companies are not the only ones feeling anxious.

A technical director of a clothing brand in Shenzhen, who did not want to be named, told reporters that the wave of price increases this year has had a relatively large impact on the company. “It is unknown whether the cost superposition can be passed on to consumers and how much consumers can absorb. The method we are taking now is to join forces with other clothing brands to centralize and aggregate their materials for purchase. Through a large amount of material preparation, Negotiate prices with fabric manufacturers to reduce costs.” He predicted that this round of raw material price increases should see a correction in the second half of this year, and prices should drop by then. But he also pointed out that even if the price of raw materials does drop, it will be difficult for fabric companies to change immediately. “After all, the ‘blood loss’ in the first half of the year needs to be made up for.”

This is indeed a concern for many fabric companies: In the first half of the year, fabric companiesThe operation of fabric companies has been greatly affected. Next, if the price of raw materials cannot return to normal prices in time, it will inevitably bring huge challenges to the operations of fabric companies throughout the year.

Companies take measures to resist pressure

Although the textile industry has been “unevenly hot” due to price increases throughout the first half of the year, and fabric companies have become “frightened”, this round of price increases has also given rise to a positive side.

At the review meeting of the 2021 China Fashion Fabric Design Competition held recently, Dong Mingtai, the purchasing manager of Evelye-commerce, was delighted to find that the participating fabrics this time had great design and design characteristics. Compared with previous years, there have been some improvements in design and material application. “Environmentally friendly and sustainable fabrics have an increased proportion of entries. These fabrics greatly reduce emissions of waste gas, waste water, etc., and can ensure a soft and skin-friendly wearing experience that satisfies nature. The demand for comfortable clothing coincides with the company’s philosophy.” He said that Eveli adheres to the concept of environmental protection, and now eco-friendly fabrics account for more than 30% of the company’s total purchased fabrics.

“The first highlight of this competition is sustainability. From the participating fabrics in the competition, it can be seen that many fabric companies have already taken on certain social responsibilities and are committed to researching sustainable fabric design. Chapter 1 The second highlight is that fabric companies have responded quickly to changes in consumer shopping habits in the context of the epidemic. Whether it is outdoor fabrics or fabrics with a soft feel, these are some good attempts.” Alibaba’s Tmall business Lu Jia, the head of the Ministry of Fashion and Fashion, said that green concepts such as environmental protection and health have long been a trend in clothing consumption. Today’s consumers have a deeper and more diversified understanding of environmental protection concepts as their cultural and educational systems have gradually improved and matured. change. “People are willing to pay for environmental protection, and green and natural fabrics can better guide consumers’ purchasing decisions.”

Obviously, in the face of the rising prices of raw materials, many fabric companies have not just waited for death. Instead, they have tried their best to resist cost pressures by practicing hard and implementing process improvements and other measures.

“The ‘pain’ caused by the price increase will inevitably cause an increase in the operating costs of fabric companies in a short period of time. Enterprises need to weaken the adverse impact of price increases on the operational level through multi-dimensional and multi-path ways.” National Chen Baojian, chief engineer of the Textile Product Development Center, pointed out that in this case, the most powerful measure for the company at the moment is to take both internal and external measures: Internally, through process improvement, continuous refinement and refinement will save more materials, save energy, and reduce consumption; Externally, a mechanism to jointly resist and share risks must be formed in the upper, middle and lower reaches of the industrial chain.

Chen Baojian also suggested that fabric companies should pay attention to changes in raw material prices at all times. When raw material prices are low, they can appropriately purchase more goods for storage. During the production off-season, the production plan can be reduced in a timely manner according to market demand. “Many companies in Keqiao have already taken this measure. Although it may not be able to completely hedge the impact, it will be mitigated to some extent.”

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