Introduction: “Basically, 20% of orders are delayed. There are market downturns, but the most critical issue is still no money.†Chen Runsheng, Deputy General Manager of Shanxi Hongji Technology Co., Ltd. Interviewed by the reporter Said.
After the reporter had interviewed a number of textile machinery companies, the situation was similar to that of Shanxi Hongji. Although the textile industry was not immediately affected by the monetary tightening policy and the impact of cotton price fluctuations in the first half of the year on the sales of textile machinery products, the sales of most textile machinery companies in the first half of the year continued the good momentum of last year, but starting from April, The number of orders received by enterprises has been significantly reduced, and individual users have delayed the delivery of goods. Since July, this phenomenon has become more prevalent. Many CEOs of textile machinery companies have said with emotion: “Last year's demand for textile machinery was in short supply. Many users took the money and waited in line to pick up the goods. This is a very good time!â€
The volatility of cotton prices and a long period of practice have proven that the textile industry has never been able to escape the cycle of changes in cotton prices.
In November last year, the price of domestic standard cotton rose all the way to the highest price of 33,000 yuan per ton. At that time, due to the simultaneous increase in the price of gauze, together with the majority of companies rushing to collect a portion of low-cost cotton before the highest cotton increase, and producing high-priced yarn with low-cost cotton, some companies made profits equivalent to the past 10 years in the past year. sum. However, at that time, many people in the industry predicted that this round of rising cotton prices will inevitably trigger a new round of industry reshuffle.
After March this year, cotton prices and yarn prices have fallen. At this time, many companies became cotton bought at high prices, but they sold cheap yarn. Before March, 328 cotton prices exceeded 31 million yuan per ton, 2.4 times higher than normal. In April, the cotton price dropped rapidly and at the end of July even fell below the state's 19,800 yuan reserve line. As the saying goes, “buy up or not buy or fallâ€, cotton is worth a day, and cotton spinning companies can hardly buy cotton. Coupled with the slump in the international market, the increase in cotton yarn and cotton cloth has significantly declined since April. According to a survey conducted by the China National Textile and Apparel Council, at the end of May, 50% of the 10,000-plus spinning mills were suspended, and 10% to 15% of the above-scale spinning mills were temporarily suspended.
Now, both textile companies and textile machinery companies are expecting that with the start of the new year's cotton collection and storage work from September 8th and the picking up of new cotton, the price of cotton can be stabilized as soon as possible. Only the relative stability of the cotton price can ensure that the textile industry can normally drive production and the sales of the textile machinery market can return to normal.
However, even if the current cotton price stabilizes, new orders for textile machinery companies will not be too much in the fourth quarter of this year. In accordance with the laws of the past, after entering September, it was originally the off-season for orders from the textile machinery industry, because textile companies started buying cotton when they had money. Therefore, the sales of cotton spinning equipment before the end of the year may fall into a more difficult situation. In addition, knitted garments that have been performing well for the past few years have suffered from the market because of the impact of yarn prices this year, which is bound to affect the sales of Taiyuan Ji. The market sales of other types of textile machinery equipment before the end of the year will not have a clear downward trend.
In fact, for the textile machinery industry, it is not the sales that are most worrying this year. Since the sales of textile machinery companies in the first half of the year were relatively good, and most of the companies' orders for the whole year were already full, what were the concerns of companies over the next year?
The concerns of textile machinery companies are not without reason. We can further analyze the investment in fixed assets since the beginning of this year. From January to June this year, the investment in fixed assets of the textile industry reached 290 billion yuan, a year-on-year increase of 37%. However, among these, new investment in fixed assets is a negative growth. This reality will soon appear in the sales of textile machinery, which means that the textile machinery industry has completed the order in the hand, and subsequent orders will be lost.
The frequent shortage of funds due to delayed delivery is a common phenomenon in textile companies. On the one hand, the endless increase in production costs has further increased the financial pressure on enterprises, including the increase in cotton prices and the large amount of funds used in the inventory of finished products caused by the fluctuation of cotton prices, as well as the persistence of fuel and electricity prices. Ascending and rising labor prices continue to rise. On the other hand, since the beginning of this year, the tight monetary policy has made it even worse for small and medium-sized textile companies that have had insufficient funds.
For many years, it has been difficult for the textile industry, especially for the vast majority of SMEs in the textile and garment industry, to remain unresolved. Whether it is day-to-day production and operations, or the expansion of scale, technological upgrades, and lack of funds, textile companies are in short supply. Since the beginning of this year, the central bank has raised the reserve interest rate for the sixth consecutive time, and the reserve ratio of large and medium-sized financial institutions has reached a record high of 21.5%. Frequently introduced monetary tightening policies have further increased the cost of the industry, and interest expenses have increased significantly. Of these, cotton textile companies are the most affected. Cotton spinning companies often use more than 70% of liquidity funds to buy cotton, while apparel companies only spend about 30% of liquidity. Due to the large capital investment, cotton spinning companies mostly rely on the purchase of cotton.
The reporter learned from the interview that since this year, many textile companies have had to lend to the private sector because they did not make loans to the bank. The increase in the deposit reserve ratio of banks has also led to an increase in the interest rate of non-government credit funds, which is almost 30% higher than private bank loans.
The money borrowed by the textile companies is generally used first in the “bladeâ€, buying cotton to maintain the normal production of the enterprise, and the textile equipment that has already placed orders can only be pushed backwards. The money went to pick up the goods. The investment projects that were originally planned to be implemented will have to be grounded.
Prepayments for orders accepted by textile machinery companies are generally between 30% and 50%, and the remaining portion is charged at the time of delivery. If textile machinery companies complete orders on time and user companies postpone their delivery, it will undoubtedly increase the inventory of textile machinery companies and their capital. Therefore, although most textile machinery companies still hold a lot of product orders that have been transferred in the first half of the year, it is still a big question mark whether they can deliver after the order is completed. In order to avoid the frequent occurrence of non-delivery, the textile machinery companies are very cautious in taking orders at this stage, and choose some "quality orders" as much as possible.
Can monetary policy be loosened? “As long as the banks can properly relax, the sales of the drawing frames will still be very good by the end of this year to the first half of next year.†Like all draw frame companies, Baocheng Aviation Precision Manufacturing Co., Ltd. this year The sale of the draw frame was very good and the order was already in the first half of next year. However, the company’s general manager Xue Baochang also worried that their customers would not be able to borrow money and postpone the delivery.
Xue Baochang believes that the existence of gaps in cotton supply and the large fluctuations in cotton prices have led many companies to naturally reduce the use of cotton and increase the amount of chemical fiber and viscose. This will undoubtedly require an additional parallel process; at the same time, chemical fiber and viscose Many companies choose short-flow vortex spinning, vortex spinning directly from the cleaning comb to the strip, which means that the market has an inevitable demand for the draw frame. In fact, it is not only a draw frame machine, such as a carding company, a compact spinning, a spinning machine with a doffing group, and a warp knitting machine, which have seen a significant increase in sales in the first half of the year, which can satisfy the automation and continuity of textile and textile companies. High-speed, intelligent, and large-capacity requirements to meet the textile industry from labor-intensive to technology-intensive transformation of the textile machinery equipment, the market demand for its rigid demand is still very large, the most critical issue is the hands of textile companies Get money to buy equipment.
So, is there a possibility of loosening monetary policy in the second half of the year?
Since the beginning of this year, due to the tight monetary policy, not only has the textile industry slowed down, but machinery, light industry, building materials, and automobiles have all declined in growth rate since April. The relevant authorities of the country believe that this is the result of the national macroeconomic regulation and control. Relevant departments and economists have always believed that most of China's manufacturing industry is extensive, and the state is to force these so-called production capacities through monetary and fiscal policies. The surplus industries change the way of development and speed up structural adjustment. However, in recent days, due to concerns about the economic downturn, the market has renewed its reiteration of monetary policy. People believe that if China continues to do so, the Chinese economy will be in danger of a hard landing. It is recommended that macroeconomic regulation and control be appropriately relaxed; but some economists still In the context of stabilizing prices as the primary task of macro-control, it is unlikely that the current monetary policy will shift.
In view of this, those loose textile companies that are looking forward to monetary policy should still be psychologically prepared. The days of "poor money" for enterprises may continue for some time. The real test may still be in the first half of next year.
After the reporter had interviewed a number of textile machinery companies, the situation was similar to that of Shanxi Hongji. Although the textile industry was not immediately affected by the monetary tightening policy and the impact of cotton price fluctuations in the first half of the year on the sales of textile machinery products, the sales of most textile machinery companies in the first half of the year continued the good momentum of last year, but starting from April, The number of orders received by enterprises has been significantly reduced, and individual users have delayed the delivery of goods. Since July, this phenomenon has become more prevalent. Many CEOs of textile machinery companies have said with emotion: “Last year's demand for textile machinery was in short supply. Many users took the money and waited in line to pick up the goods. This is a very good time!â€
The volatility of cotton prices and a long period of practice have proven that the textile industry has never been able to escape the cycle of changes in cotton prices.
In November last year, the price of domestic standard cotton rose all the way to the highest price of 33,000 yuan per ton. At that time, due to the simultaneous increase in the price of gauze, together with the majority of companies rushing to collect a portion of low-cost cotton before the highest cotton increase, and producing high-priced yarn with low-cost cotton, some companies made profits equivalent to the past 10 years in the past year. sum. However, at that time, many people in the industry predicted that this round of rising cotton prices will inevitably trigger a new round of industry reshuffle.
After March this year, cotton prices and yarn prices have fallen. At this time, many companies became cotton bought at high prices, but they sold cheap yarn. Before March, 328 cotton prices exceeded 31 million yuan per ton, 2.4 times higher than normal. In April, the cotton price dropped rapidly and at the end of July even fell below the state's 19,800 yuan reserve line. As the saying goes, “buy up or not buy or fallâ€, cotton is worth a day, and cotton spinning companies can hardly buy cotton. Coupled with the slump in the international market, the increase in cotton yarn and cotton cloth has significantly declined since April. According to a survey conducted by the China National Textile and Apparel Council, at the end of May, 50% of the 10,000-plus spinning mills were suspended, and 10% to 15% of the above-scale spinning mills were temporarily suspended.
Now, both textile companies and textile machinery companies are expecting that with the start of the new year's cotton collection and storage work from September 8th and the picking up of new cotton, the price of cotton can be stabilized as soon as possible. Only the relative stability of the cotton price can ensure that the textile industry can normally drive production and the sales of the textile machinery market can return to normal.
However, even if the current cotton price stabilizes, new orders for textile machinery companies will not be too much in the fourth quarter of this year. In accordance with the laws of the past, after entering September, it was originally the off-season for orders from the textile machinery industry, because textile companies started buying cotton when they had money. Therefore, the sales of cotton spinning equipment before the end of the year may fall into a more difficult situation. In addition, knitted garments that have been performing well for the past few years have suffered from the market because of the impact of yarn prices this year, which is bound to affect the sales of Taiyuan Ji. The market sales of other types of textile machinery equipment before the end of the year will not have a clear downward trend.
In fact, for the textile machinery industry, it is not the sales that are most worrying this year. Since the sales of textile machinery companies in the first half of the year were relatively good, and most of the companies' orders for the whole year were already full, what were the concerns of companies over the next year?
The concerns of textile machinery companies are not without reason. We can further analyze the investment in fixed assets since the beginning of this year. From January to June this year, the investment in fixed assets of the textile industry reached 290 billion yuan, a year-on-year increase of 37%. However, among these, new investment in fixed assets is a negative growth. This reality will soon appear in the sales of textile machinery, which means that the textile machinery industry has completed the order in the hand, and subsequent orders will be lost.
The frequent shortage of funds due to delayed delivery is a common phenomenon in textile companies. On the one hand, the endless increase in production costs has further increased the financial pressure on enterprises, including the increase in cotton prices and the large amount of funds used in the inventory of finished products caused by the fluctuation of cotton prices, as well as the persistence of fuel and electricity prices. Ascending and rising labor prices continue to rise. On the other hand, since the beginning of this year, the tight monetary policy has made it even worse for small and medium-sized textile companies that have had insufficient funds.
For many years, it has been difficult for the textile industry, especially for the vast majority of SMEs in the textile and garment industry, to remain unresolved. Whether it is day-to-day production and operations, or the expansion of scale, technological upgrades, and lack of funds, textile companies are in short supply. Since the beginning of this year, the central bank has raised the reserve interest rate for the sixth consecutive time, and the reserve ratio of large and medium-sized financial institutions has reached a record high of 21.5%. Frequently introduced monetary tightening policies have further increased the cost of the industry, and interest expenses have increased significantly. Of these, cotton textile companies are the most affected. Cotton spinning companies often use more than 70% of liquidity funds to buy cotton, while apparel companies only spend about 30% of liquidity. Due to the large capital investment, cotton spinning companies mostly rely on the purchase of cotton.
The reporter learned from the interview that since this year, many textile companies have had to lend to the private sector because they did not make loans to the bank. The increase in the deposit reserve ratio of banks has also led to an increase in the interest rate of non-government credit funds, which is almost 30% higher than private bank loans.
The money borrowed by the textile companies is generally used first in the “bladeâ€, buying cotton to maintain the normal production of the enterprise, and the textile equipment that has already placed orders can only be pushed backwards. The money went to pick up the goods. The investment projects that were originally planned to be implemented will have to be grounded.
Prepayments for orders accepted by textile machinery companies are generally between 30% and 50%, and the remaining portion is charged at the time of delivery. If textile machinery companies complete orders on time and user companies postpone their delivery, it will undoubtedly increase the inventory of textile machinery companies and their capital. Therefore, although most textile machinery companies still hold a lot of product orders that have been transferred in the first half of the year, it is still a big question mark whether they can deliver after the order is completed. In order to avoid the frequent occurrence of non-delivery, the textile machinery companies are very cautious in taking orders at this stage, and choose some "quality orders" as much as possible.
Can monetary policy be loosened? “As long as the banks can properly relax, the sales of the drawing frames will still be very good by the end of this year to the first half of next year.†Like all draw frame companies, Baocheng Aviation Precision Manufacturing Co., Ltd. this year The sale of the draw frame was very good and the order was already in the first half of next year. However, the company’s general manager Xue Baochang also worried that their customers would not be able to borrow money and postpone the delivery.
Xue Baochang believes that the existence of gaps in cotton supply and the large fluctuations in cotton prices have led many companies to naturally reduce the use of cotton and increase the amount of chemical fiber and viscose. This will undoubtedly require an additional parallel process; at the same time, chemical fiber and viscose Many companies choose short-flow vortex spinning, vortex spinning directly from the cleaning comb to the strip, which means that the market has an inevitable demand for the draw frame. In fact, it is not only a draw frame machine, such as a carding company, a compact spinning, a spinning machine with a doffing group, and a warp knitting machine, which have seen a significant increase in sales in the first half of the year, which can satisfy the automation and continuity of textile and textile companies. High-speed, intelligent, and large-capacity requirements to meet the textile industry from labor-intensive to technology-intensive transformation of the textile machinery equipment, the market demand for its rigid demand is still very large, the most critical issue is the hands of textile companies Get money to buy equipment.
So, is there a possibility of loosening monetary policy in the second half of the year?
Since the beginning of this year, due to the tight monetary policy, not only has the textile industry slowed down, but machinery, light industry, building materials, and automobiles have all declined in growth rate since April. The relevant authorities of the country believe that this is the result of the national macroeconomic regulation and control. Relevant departments and economists have always believed that most of China's manufacturing industry is extensive, and the state is to force these so-called production capacities through monetary and fiscal policies. The surplus industries change the way of development and speed up structural adjustment. However, in recent days, due to concerns about the economic downturn, the market has renewed its reiteration of monetary policy. People believe that if China continues to do so, the Chinese economy will be in danger of a hard landing. It is recommended that macroeconomic regulation and control be appropriately relaxed; but some economists still In the context of stabilizing prices as the primary task of macro-control, it is unlikely that the current monetary policy will shift.
In view of this, those loose textile companies that are looking forward to monetary policy should still be psychologically prepared. The days of "poor money" for enterprises may continue for some time. The real test may still be in the first half of next year.
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