Low Price Competition Disturbs The Market

Recently, Jiangsu Peixian Textile Association issued a Joint Convention on production restriction In view of the impact of the current epidemic situation on textile export, the imbalance of supply and demand, and the high price of raw materials, yarn sales appear malignant bidding. In order to relieve the pressure of the market, after the joint discussion and unanimous approval of all member units, it is decided that from June 20, each enterprise will limit production by 30% - 50% according to its own operation conditions 。

The new crown pneumonia epidemic and the traditional textile off-season make Peixian textile enterprises accumulate more pressure. In order to alleviate the pressure of inventory and capital, many textile enterprises have low-cost shipment, resulting in price war, and the market is in vicious competition. As a common organization of textile enterprises, the local association intervenes and issues this Joint Convention, which also reflects the current survival dilemma of textile enterprises 。

Peixian County, located in the north of Xuzhou City, Jiangsu Province, is a major cotton yarn production county and an important cotton yarn and viscose yarn production base. There are 510 textile enterprises in Peixian County, with 1.76 million rotor spinning spindles and an annual output of 800000 tons of viscose yarn.

In recent years, Peixian county has vigorously promoted the development of the textile industry by "highlighting planning guidance, optimizing the development environment, promoting resource integration, eliminating backward production capacity, and playing the role of the association". In 2017, Peixian was awarded the title of "China viscose yarn production base county".

In order to coordinate the whole industry chain, Peixian Textile Association has actively worked with downstream enterprises to cultivate new markets. Peixian county has planned a 20 square kilometer green textile industry new town in China (Huaihai), and planned to build a world-class Lyocell fiber technology academician workstation and R & D center, and a domestic textile university to form a new textile material base integrating production, learning and research It will become the largest and world-class production and trading center of new textile materials, high-quality yarn and high-grade fabrics in China, drive the transformation and upgrading of the entire textile industry, and inject new powerful power into the most competitive characteristic industrial base in Huaihai economic zone.

Due to the shortage of orders in the traditional textile market, many enterprises go further due to the low stock market. It is understood that, At present, the starting rate of local viscose yarn enterprises in Peixian county has been reduced to 78%, and the production of some large enterprises has been reduced by 10% ~ 30%. Some enterprises have started stably but adjusted to produce fine count yarn.

At present, it is a common phenomenon for enterprises to reduce orders by more than 50%. The most direct impact of order reduction is the increase of inventory. In order to avoid all the working capital turning into raw materials, finished products and workers' wages, most textile enterprises have changed the high starting rate in the early stage and started to reduce the operating rate to 80%, 50% and even less than 20%.

It is understood that there are not many local textile enterprises in Peixian county that have a holiday for the Dragon Boat Festival, but this does not mean that the workers have no holidays. In fact, due to the reduction of production, many workers in spinning factories have entered the state of rotation. Some enterprises also said that the current half of the boot state is no different from the holiday. If there are orders to start work, there are no orders to take a vacation. Although there are hopes for August, the expected retaliatory rebound of orders is still not strong. At present, the degradation of cotton yarn and grey cloth is common in China. Many enterprises choose to give up export orders with low profits, step up the distribution of domestic sales, actively reduce the grade of products, ensure the diversity of products and meet the needs of customers.

Peixian spinning enterprises said, Recently, European order inquiry and proofing have increased, and orders from Turkey and other countries have successively arrived at the factory. However, foreign trade orders have not been able to increase in volume. In addition, domestic sales orders have returned to the off-season, and have continued to weaken. Orders are "too much meat but less meat". The enterprise's processing profit is meager, and the market situation of production loss leads to the low enthusiasm of enterprises in processing, which forces textile enterprises to limit production or even have holidays in the off-season.