At The End Of August, Textile Market Improved, But Profit Margins Were Slight.

Near the end of August, some manufacturers and traders responded to the recent increase in orders, and the textile market began to improve. Is this trend of improvement a flash in the pan or a harbinger of real warming? I will analyze briefly in the future.

Figure 12018-2019 price trend chart

According to my agricultural product network, with the end of the month, the gray fabric market has recovered, but it is far from the same period last year. The spot market of pure cotton regular varieties of grey fabric is abundant, and the cloth factory has a continuous losing state due to the poor cash flow. Price competition is fierce. 21 gauze cards, 60 fine cloth down 0.1-0.3 yuan / m, 32 twill price cut 0.5 yuan / m, 40 poplin down 0.3 yuan / meter, and more importantly, some manufacturers sell below 60 yuan for the price of less than 0.5 yuan / meter. Although the conventional varieties of cotton shave grey cloth are acceptable, some specifications are reduced by 0.1-0.4 yuan / m, and the profit margins of weaving mills are greatly reduced. Home textile parts factory orders improved, which can last for 2 and a half months. In some areas of the cotton and polyester factories, shipments of some specifications have been speeded up, but the price is still low. Some manufacturers reflect the increase in orders in Southeast Asia, but there is still room for reduction in the price of cloth. So although the order has been increased recently, the profit is very small.

Figure 22018-2019 chart of yarn and cloth inventory

As can be seen from the above picture, inventory of grey fabric began to decrease slightly from last month. According to my agricultural product network, the upstream cotton yarn spinning and high quality yarns are more popular recently. Some manufacturers began to actively make winter orders and speed up the inventory consumption in the early stage, so the amount of cotton yarn purchased by the downstream fabric manufacturers increased. According to my agricultural product network, the inventory of textile enterprises has declined recently, and the rate of starting up has risen since last week. At present, the market is showing signs of a rebound.

Figure 42018-2019 textile and garment export statistics

According to the statistics of the General Administration of customs, China's textile and apparel exports reached 27 billion 520 million US dollars in July, a steady increase of 2.5% over the same period last year. Although there was a slight increase in clothing exports in July, the overall trend continued to decline. Among them, the export of woven garments in China dropped by more than that of knitted garments, while exports to the major markets of the United States, the European Union and Japan generally declined, and the United States, Europe and Japan grew rapidly from Vietnam and Bangladesh. But it is understood that in August, China's textile and clothing exports to Southeast Asian countries have increased, then the textile and clothing in August will have a slightly good momentum, please pay attention to the export data in August.

All in all, the market is now in the "demarcation line" of the peak season. We all have expectations for the market in September and have continued to lose ground. In the light of the current situation, orders for textile enterprises have indeed increased, and orders for dyeing mills have also been slightly improved, and grey fabrics are coming in quickly. However, the recent market macro factors are bad.