It must be mentioned that although the trade in the textile machinery industry has achieved year-on-year growth and market heat has increased, it cannot be denied that while the textile machinery industry is thriving, the homogenization competition in the textile industry is becoming increasingly severe.
The low threshold for engaging in the filament weaving industry is the main reason for the explosive growth of textile enterprises in the past period. “Zhou Zhengxu, General Manager of Nantong Hengchang Textile Co., Ltd., admitted that a few years ago, as long as enterprises had a certain financing ability, they could spend five to six million yuan to buy more than ten looms and enter the industry on a small scale. The equipment can be paid in installments and the technical requirements are not high, so they can easily operate
Unreasonable investment is also the root cause of industry difficulties. From years of work experience, it can be seen that as long as the market slightly rebounds, there will soon be enterprises expanding production. For example, the person in charge of Yongshang Textile Co., Ltd. stated that in the second half of 2019, due to downstream customers attempting to develop new products to drive consumption, the variety increased, resulting in an increase in demand for gray fabric. The market liquidity suddenly improved, resulting in the addition of about 2000 weaving machines in the local area, but this prosperous period only lasted for a few months. For example, the market only needs 10 million meters of fabric, but now there are 11 million meters in circulation in the market. We cannot assume that only the 1 million meters of fabric are affected, and the remaining 10 million meters cannot be sold at a good price
The industry is in trouble not simply because demand is suppressed, but also because market supply exceeds actual demand. In recent years, due to the trend of coastal elimination, more and more weaving factories have been established, and the number of machines has multiplied. Moreover, the production of products in conventional varieties has led to a surplus of inventory in the market. Moreover, it will still be difficult to improve the oversupply of conventional products in the next 1-2 years. Unable to fully digest inventory and unable to place further orders without funds, we are in a dilemma.