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The textile market of 2019 has passed one third!
In May, for those who do textiles, they did not feel the trading atmosphere of the "warm ocean" in the past, but there was a sense of "cold wind".
After the May 1st holiday, I felt that many textile bosses advertised frequently in the circle of friends and groups, and they were looking for orders everywhere.
According to the market in previous years, this time is not busy, it should not be awkward. Under normal circumstances, the factory should now be rushing to the list of summer fabrics. Is it difficult to prepare for the summer vacation in the first half of this year?
The textile and garment industry is basically an industry concentrated in most of the small and medium-sized micro-private enterprises in the Yangtze River Delta and the Pearl River Delta region. Since 2016, the two major measures of environmental protection and safety supervision have been “double-pronged”. Many small and micro factory owners have been forced to move out or change careers. The market capacity tightening has caused the market to improve. For those who insist on this industry, they have eliminated. A batch, it will certainly be better to survive, but the current textile industry does not seem so optimistic.
Xiaobian learned from the major weaving clusters in Jiangsu and Zhejiang that the entire fabric market is gradually weakening, and the orders of the textiles are not good. Let's take Haining and Changxing markets as examples. What are the performances of these two major markets?
Haining market: If you are less than three days off, you will have five or six days!
Before, I have been talking about the garment factory in Guangzhou area. There are no signs of starting work for five days this year. In most of this year, most of the holidays are going straight. It is common to work overtime to work overtime, but this year’s scene and last year’s scene Compared with the two days, some factories with poor performance were forced to shut down.
This phenomenon is also staged in Haining. It is understood that many warp knitting factories in Haining during the May 1 period have also been put on leave, ranging from three days to five or six days, and the market operating rate has also dropped to 7-8 percent. .
In fact, this phenomenon was revealed as early as late April. With the completion of the orders in the new year, the new orders were weak, which led to poor sales of knitted fabrics and increased market inventories. Some Haining bosses said that if the market is not good, in order to reduce inventory, they will choose holiday. The result was still not unexpected, and the market orders did not improve.
It is reported that due to the good performance of the warp knitting market for three consecutive years, the companies in Haining in the year of 2017 and 2018 have introduced 1,300 sets of production equipment KS warp knitting machines, which has increased by more than 20% compared with the original equipment. The surge in demand and terminal demand did not improve as expected, which led to Haining’s warp knitting industry being dragged down by the market.
At present, many small and medium-sized enterprises have been worried about receivables and increasing inventory, and can only alleviate the contradiction and difficulties of current production and operation by reducing profits or operating rates.
Changxing Market: Sales volume decreased year-on-year, and the off-season was one month ahead of schedule!
As the third textile production county after Shaoxing and Xiaoshan in Zhejiang Province, Changxing has a high concentration of production capacity. At present, the county produces a total of 7 billion meters of chemical fiber filament weaving cloth, 1.6 billion meters of printing and dyeing cloth, 115,000 tons of non-woven fabrics, more than 4 million garments (including leather garments), and the industrial output value of textile industry is 35.3 billion yuan. It accounts for 31% of the industrial output value of the county. In Changxing Textile City, almost 90% of textile companies are doing the business of sanding cloth.
Declining turnover, falling profits, and rising stocks have become a particular headache for textile owners. In the Changxing market, there are many enterprises of the same type, mainly home textile products, product homogeneity is serious, market competition is poor, especially when the market is depressed, it is more likely to cause vicious competition and price war.
Shengze: Inventories rose, and the grey cloth factory issued a price reduction notice.
In addition, Oxford cloth as the main product of luggage fabrics, this year's performance is also unsatisfactory. It is reported that the recent sales of polyester filament oxford cloth is weak, the inventory of manufacturers is rising obviously, although the performance of all-elastic products is acceptable, but the stamina is insufficient. According to the monitoring statistics of the sample enterprises in China Silk Market, the inventory of grey cloth in Shengze area is about 38 days, which is nearly half a month compared with the same period of last year.
In the face of rising inventory, the cloth boss secretly anxious. As early as the author visited the market in mid-April, many textile owners said that if the market is still so weak, it is not ruled out that this year will put the price drop ahead, in order to seize market share. Sure enough, on the first working day of the small holiday, there will be new price adjustment information for textile companies: the price is lowered by 5 points!
In fact, this price adjustment information is only one of a lot of information. With the completion of the previous orders, the new orders follow-up slowly, resulting in a small number of manufacturers have entered the off-season without any single status, and the market inventory has risen significantly. Although in order to retain the workers and maintain market share, manufacturers will not reduce the operating rate, but in the face of the increasingly weak market outlook, many manufacturers began price reduction measures at the end of April.
Let’s look at cotton spinning:
One day and one night, the cotton price has fallen by nearly 10%!
Shortly after the opening of the morning of May 13, Zhengzhou cotton futures price fell across the board, and some contracts for cotton yarn futures also fell to the limit until the close of the day. In the evening trading hours of the evening, the cotton and cotton yarn futures prices did not change, and the cotton futures main 1909 contract and the distant month 2001 contract fell again after the expansion. One day and one night, the cotton price has fallen by nearly 10%.
On May 14, domestic cotton futures continued their decline. Zheng cotton and cotton yarn futures main contracts fell. The main contract of Zhengmian futures fell 7.03% to 13,820 yuan, and the main contract of cotton yarn futures fell 6.91% to 22,165 yuan. Zheng Shang Institute also issued a risk warning letter today to remind investors to pay attention to risk prevention work.
What is the logic behind this two-day continuous downtrend? What is the interpretation of market participants?
Trade dispute escalation, downstream demand slows down
On May 13th, the US Trade Representative (USTR) Office issued an announcement to solicit 25% tariffs on Chinese goods for about $300 billion and hold public hearings. USTR also published a cover for 3805 in the annex. A list of products, including mobile phones and laptops.
USTR will hold a public hearing on this list on June 17 and stop submitting written comments. USTR requires the submission of public hearing evidence and materials before June 10, and the deadline for collecting opinions on June 24, the time limit for soliciting opinions is obvious. Shorter than the previous period of soliciting opinions on Chinese goods.
Since April, textile and apparel consumption has continued to weaken. According to customs data, in April 2019, China’s exports of textiles and clothing decreased by 9.43% year-on-year, and the cumulative exports in January-April decreased by 8.45%. In February, the US imports of Chinese textiles and apparels fell year-on-year, while imports to Vietnam and India increased sharply year-on-year. The impact of the previous trade frictions between China and the United States has prompted US traders to switch to Southeast Asia, and domestic textile consumption has shown a “high season”. In the case of a weaker, lighter off season, the downstream industry market is obviously off-season, and the lack of demand has been pressing the disk.
In the newly added list of 200 billion yuan, it involves about 4 billion US dollars to export textile and clothing to the United States. If the US imposes tariffs on the remaining 300 billion US dollars, it will include woven garments and knitted garments with large exports from China to the United States. And household textile products and other commodities, involving about 45 billion US dollars to export textiles and clothing to the United States, the export of downstream textile and apparel will be blocked to be transmitted to cotton consumption, it is estimated that the domestic consumption will be reduced by about 1 million tons, domestic cotton consumption There will be a reduction of about 12%. It can be seen that about 15% of the goods that have been re-applied with tariffs are related to cotton-spun products, so the impact on the cotton spinning industry is relatively large.
US cotton production is expected to increase
In the US Department of Agriculture report released on May 10, US production in 2019/20 is expected to be 4.79 million tons, an increase of 791,000 tons from the previous year. The ending stocks increased by 381,000 tons to 1.393 million tons from the previous year. The output increased by 1.529 million tons from the previous year to 27.715 million tons. The global consumption increased by 701,000 tons from the previous year to 27.418 million tons. The inventory-to-consumption ratio fell to 60.10%. From the data of the report itself, the global cotton stock consumption ratio The decline is good for the global market, but for the US cotton is bad, the US cotton market, the US cotton production is increasing, and the expected accuracy of the increase in exports and consumption may not be satisfactory. The current Sino-US trade relationship is blurred and the global economy is worrying. Under the circumstances, the increase in global and China's cotton consumption is expected to be considered. As the largest cotton importer in the United States, the escalation of trade friction directly affects the export volume of US cotton to China.
Domestic inventory and policy guidance
According to the China Cotton Association, the total amount of cotton stocks in the country at the end of April was about 3,794,900 tons, a decrease of 369,100 tons from the previous month, but the commercial inventories still increased by 921,500 tons last year. The domestic cotton commercial stocks remained at a high level during the same period. In addition, 19 The annual quota of 800,000 tons of sliding tax quotas was introduced earlier than last year. The surplus cotton reserves continued to supplement cotton supply. The supply of cotton market continued to increase, while the downstream textile enterprises had poor profits, orders decreased, demand was not good, and the overall performance of the industry Oversupply status.
In summary, the current market is still in the process of emotional venting, or there is still room for decline. If the negotiations between China and the United States progress, the cotton price of 14,500 yuan / ton may have support. If the friction between the two sides continues to escalate, Zheng cotton may fall in the extreme case. To the vicinity of 13,500 yuan / ton.
From the current textile market, most textile owners have encountered similar problems: poor terminal demand, serious homogenization competition, and lower market profits. At present, the global textile industry is highly competitive. The textile industry in India, Vietnam and Bangladesh continues to crowd out the market of China's textile enterprises, and the substitution effect is becoming more and more obvious.
In addition, since 2012, China's social retail sales growth rate has been in the downward channel, the demand for clothing, footwear and other industries have declined, which also led to the domestic market demand for textile clothing is not optimistic.
Be safe in times, traders but seek a "stable"
In the near stage, with the impact of foreign grey fabrics on the market, conventional chemical fiber fabrics such as polyester taffeta, Chun Yafang, and Nisifang have performed in general, and the market supply exceeds demand, resulting in the weakening of the trading rights of weaving manufacturers this year. Relatively much better, even so, there are still many traders who dare not rush to buy goods, in addition to concerns about the market outlook, the control of cash flow is more stringent.
In addition, with the increase in raw materials, labor and dyeing fees, many traders said that the profit margin has shrunk. "Now do not seek more money, only to make orders secure, and the collection of goods is satisfactory" has become the voice of many traders.
Many bosses think that this year's "Golden Three Silver Four" is afraid of being yellow. Last year's off-season was made into a peak season. This year's peak season or off-season has made textile owners feel awkward, but this is also the market released into the survival of the fittest, the survival of the fittest. The signal, who reflects the product quickly, low cost, excellent quality can stand out.
In the next June, the textile people will continue to bite and stick to it! Textile people, come on!
Xuzhou Heping Chemical Fiber Co., Ltd., located in Xuzhou Huaihai Economic Development Zone, provides customers with high-quality and high-quality polypropylene high-strength yarns with the production technology, strict quality control system and high-quality after-sales service. The product performance is good and the price is right, and can support the customized sample. The main products of peaceful production are: polypropylene industrial silk, split film industrial yarn, high-strength polypropylene network wire, polypropylene high-strength wire, polypropylene high-strength wire and other polypropylene products.