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In 2023, the keyword of the textile industry is "change", the international situation is changing, the economic situation is changing, and the textile industry is also changing. Now, the "great changes not seen in a century" are still continuing, and textile people will face new challenges in the New Year.

I. Challenges

Worsening overcapacity

In 2023, one of the most common words heard by textile people is "roll".

The market is too big, the new loom capacity is too much, more than 800,000 water jet looms, and the expanding jet, knitting and other production capacity, the domestic production of a variety of cloth more than 50 billion meters a year. Although the "clothing" inside the food, clothing and transportation is just needed, there is a fixed demand every year, but the number is always limited, and the current production capacity has far exceeded the demand.

Therefore, the real feeling of textile enterprises is that as long as it is a conventional variety, it is difficult to sell the price, the profit is very thin, there are too many competitive products on the market, the price is very transparent, old customers are useless, as long as the price is high, customers will run out.

In 2024, the trend of the transfer of weaving capacity to the central and western regions is far from stopped, and the capacity expansion of some large weaving enterprises has been included in the planning, and overcapacity will not be alleviated, but may continue to intensify.

High inventory

The high cotton yarn inventory of traders is the sword of Damus hanging over the head of cotton spinning enterprises in 2024, and the current cotton yarn inventory is passively accumulated to a historical high waiting for digestion. Domestic weak recovery continues, while overseas is still in the storage cycle, European and American orders can not see a turnaround, the first quarter of the cotton textile industry chain market situation can improve may depend on the market can quickly digest cotton yarn inventory. Overall, it is expected that domestic cotton prices will continue to bottom out in early 2024, until there is significant progress in cotton yarn storage.

Cash flow impact

Many textile enterprises have reflected that the payment for goods for 23 years is difficult to collect, and it is common to default on the payment for goods for one or two months, mainly because of the money shortage.

Consumers choose to control consumption under pessimistic economic expectations, reduce the amount of textile consumption, and the living water flowing into the source of the market is less, and there is a "money shortage" in the textile industry.

In 2023, in the "money shortage" risk accumulation stage, the overall risk of the market is still controllable, but after a year of contradiction accumulation, there may be more textile enterprises in 2024 into a tight situation, enterprises are trapped in financial pressure, holidays, production cuts may be more frequent. We also see that some enterprises have the risk of cash flow fault, which has an impact on business operations.

The outlook for the global economy is gloomy

The market expects that in 2024, the Federal Reserve will stop raising interest rates and enter a rate cut cycle. However, the main economic stage in Europe and the United States is still plagued by inflation, and once it enters the interest rate cut cycle, it may produce the "stagflation" that people are most reluctant to see, and economic development is stagnant.

And in the unfavorable economic environment, many developed countries rely on "living on the old", but the old capital is limited after all, once these major economies have problems, there may be a chain reaction, resulting in the formation of a global economic crisis.

In addition, economic problems can also appear spillover, such as the recent Red Sea crisis, to some extent, is also the risk of economic problems spillover, 24 years of various unexpected "black swan" events are not small probability.

The inner volume develops rapidly

When the problem arises, the way to solve the problem is often contained in it. The textile market continues to roll, in order to survive, a large number of textile enterprises in the competition to improve themselves, because the current market, do not develop is likely to be eliminated. In the fierce competition, the textile industry technology has been rapidly iterated, and some of the company's past ills have been exposed. The market continues to survive the fittest, new products, new technologies, new concepts emerge in endlessly, and the market competitiveness of enterprises is rapidly increasing with the development of time.

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