Oil Prices Drop, Cloth Market Profits Rise

"The price of oil has finally dropped."

Tang Liying, owner of Qingfeng cloth industry, took a sigh of relief.

This year, oil prices have surged, and the chemical fiber fabrics he produces and runs directly bear the influence of oil.

When oil prices dropped, he naturally applauded.

In addition, because of the difficult price increase of cloth, some cloth manufacturers reduce the quality of products in disguised form.

Pressure on price increase, large customers do not accept

Tang Liying's Qingfeng cloth industry is located in Humen international cloth trading center, and has gathered a large number of fabric shops in Humen, a famous clothing industry.

This year, Tang Liying's deepest feeling is the soaring cost of raw materials.

Polyester, acrylic, viscose staple fiber and other chemical fiber fabrics need to directly extract raw materials from petroleum.

International crude oil prices have surged since the second half of last year.

Tang Liying found that from the beginning of this year to the end of May, the raw materials of chemical fiber fabrics had risen by 35%.

"If the cost has gone up so much, has your cloth been properly raised?" Tang Liying reluctantly laughed at the question. "It is too difficult to raise prices, customers will not accept it, and the price will go up."

Tang Liying's cloth wholesale price increases by about 7%-8%, and a large part of the cost can only be borne by himself, and the direct impact is the shrinkage of profits.

"Profit is not high, about 10%, now only 1%-2%, or even zero profit."

Jiangsu Hua Sen Weaving Co., Ltd. also rented a pavement in Humen, and Tao Xueping, the boss, was also worried about the reduction of profits.

"The cost has gone up too much, though it will not earn no money, but the business will not work well."

Oil prices rebounded

Tao Xueping pays close attention to the price trend of oil and chemical fibers related to cloth every day.

"It has finally come down recently."

Affected by the Greek debt crisis, international oil prices fell last month, but domestic oil prices did not begin to decline until June 1st.

Chemical fiber raw materials have also been lowered.

The market quotation of polyester staple in June 2nd was 9700 yuan / ton, down 50 yuan per ton compared with the previous day.

The cost of raw materials has declined, and the fabric producers are naturally happy. The profits of serious compression can at least pick up a bit.

But many bosses have no confidence in whether they will continue to fall.

The price of oil has gone down, but the price of cotton which is closely related to clothing is still rising.

Nandu reporter found that in the past half a year, the national cotton price index has risen from 145 million yuan / tons to nearly 175 million yuan / ton, up 20%.

Another expert said that because of the unusual climate this year, cotton production will be affected.

This means that the production cost of cotton fabric related to cotton will continue to rise.

Phenomenon: Jerry building and reducing cost pressure

Facing the cost increase, cloth production and operators are thinking about how to pfer cost pressure.

Market competition is large, customers can only accept a small part of the price increase.

But there is no way to lose money in doing business. What else can we do to shift the cost pressure?

Tang Liying, owner of Qingfeng cloth industry, said that in order to ensure a certain profit, only the "Jerry building" of products, such as the specifications and quality of cloth under the premise of constant price, is relatively small.

Mr. Ye, the boss of Jisheng cloth industry, also admitted that reducing the quality appropriately is a feasible way to reduce the cost pressure under the present circumstances.