A new wave of rising prices for raw materials is hitting hard. EVA, rubber, PU leather, cartons are also ready to move, the price of all kinds of materials break through the highest point in history, along with workers’ wages are “rising”, shoes and clothing industry chain has a trend of soaring……
A number of shoes and clothing industry chain in the middle and lower reaches of the people’s analysis, this round of price rises fierce, lasting, some of the fierce rise of raw materials and even “by the hour”, to the high frequency of morning quotation afternoon price adjustment. It is predicted that this round of price rises will continue until the end of this year as systematic price rises in the industrial chain, accompanied by insufficient supply of raw materials upstream and soaring prices.
Below this one background, the performance of the upstream enterprise floats red, the middle and downstream enterprises complain repeatedly, ice and fire double heaven. Some insiders point out that this will accelerate the trend of industrial chain reshuffle, and only enterprises with sufficient cash flow, good reputation, innovation ability and long-term comprehensive strength can survive in this round of competition.
“EVA prices started going up in August and September.” Mr. Ding, a jinjiang businessman who did not want to be named, said, “An important reason for the price increase is the change in supply and demand. After August, the shoe industry has entered the peak production season, and some overseas orders have been transferred to domestic production.” Mr. Ding told reporters that since August, the order of the enterprise has been in a relatively tense state, from time to time there are additional orders, “but for the early order has been ordered our production cost is undoubtedly increased, but this part of the loss can only be borne by ourselves.”
At present, most foreign brands, retailers do not accept the upward quotation of enterprises, the rise of raw materials is difficult to pass to terminal orders, export-oriented enterprises bear the capacity is limited. So, either “abandon order”, or absorb the rising cost of raw materials alone. Either way, manufacturers will suffer.
The seemingly hot market, to a large extent, is due to the market clearing effect caused by the closure of a large number of enterprises, rather than the complete recovery of the domestic and foreign markets. In previous years, this time is also the peak season of the industry. From the market, there is no complete recovery of demand, or even demand exceeds supply. The price rise of the upstream industry did not bring the recovery of the textile industry, but only squeezed the profits of downstream enterprises.
Many enterprises point out that in the second half of each year in October and November, the finished goods spot market on the market will usher in a more concentrated year before stock. This is also the more common “market order” in the market, this period of time the order volume is large, the type is limited, the duration is short. That time frame is here, and orders are coming in stronger than ever.
Therefore, the reason for the current hot market is not so much the recovery of demand as the transfer of inventory. There are still great uncertainties in demand recovery, and there are also concerns among textile enterprises. After experiencing overcapacity in 2019 and the COVID-19 epidemic in 2020, enterprises are generally accustomed to “take one step and see three steps”. The sharp rise in the raw material end coupled with predictable terminal demand cliff, industry insiders suggest that all parties have a strong wait-and-see mentality, buyers remain cautious, there may be a fall in the price risk, do not leave the last “chicken feathers”.
Post time: Sep-13-2021