Life is a mystery, you never know when a surprise will appear.
Some time ago, when the editor was chatting with a friend, we “hatred the rich” together.
She said: “Rich people are really lucky. A relative of mine opened a factory. The business was good in the first two years and I made a little money. Last year, the market started to decline. Well, the business has been bad, and the cloth has been unable to be sold. When I was melancholy, I caught up with the demolition, and I spent 20 million to demolish it all at once, and I was liberated! I bought a villa for 5 million, and now I am opening a small trading company. Taking small orders and traveling all over the world every three days, others can only envy and hate you.”
Look, sometimes the god of luck comes, and the demolition really “saved” countless people. In recent days, Mr. Shen, a certain textile boss, also casually mentioned the matter of demolition.
Mr. Shen said: “I heard that our factory is in the demolition plan and may be demolished next year. In fact, it is quite good. The market situation in 2019 really made me grow old overnight. It was hard to sleep and eat well. A small factory like ours with only forty or fifty machines couldn’t stand the trouble. Money was hard to come by, cloth was hard to sell, but various expenditures were indispensable. After New Year’s Day, the inventory was too much to pile up. , it has become one of the first factories to take a holiday. If it is demolished, it will be compensated for five to six million, and pension will not be a problem, and some can be left for future generations.”
Indeed, the market situation in 2019 makes many cloth bosses afraid to think back: tens of millions of meters of inventory, gray cloth prices falling by 30%-40%, raw material prices continuing to fall, sell-offs are common, peripheral looms continue to rise, and terminal demand is increasingly sluggish. Sino-U.S. trade is becoming more and more intense… Large companies are more capable of resisting the attack, while small and medium-sized enterprises have been hit hard, and there are many closures.
Although the vast majority of textile people are not optimistic about the market in 2020, the editor believes that there is still hope!
From the perspective of raw materials:
There is no room for rebound in raw material prices. Larger
In 2019, raw material prices continued to fluctuate, and the overall price focus continued to decline. It can be said that the price of raw materials in 2019 has reached a new low in recent years. The constant decline in raw material prices has directly caused the price of gray fabrics to follow suit. Coupled with the difficulty in stabilizing production and sales, inventories are even less valuable. Stable raw material prices are stable. Based on the price of gray cloth, the falling raw materials can only make the already unsatisfactory textile market worse.
At the beginning of the new year of 2020, due to geopolitical factors, the polyester market exploded, and polyester filament also followed the upward trend. The price focus of each product has increased to varying degrees. At present, , although prices have remained stable in recent days and no longer rise, there is no downward trend. Prices of raw materials have fallen hard, so there is still plenty of room for a rebound. During the Spring Festival, chemical fiber manufacturers chose to limit production and protect prices, which gave polyester yarn a reason to hold up prices. At the same time, according to convention, the price of polyester yarn will generally rise a little after the beginning of the new year. Therefore, from the editor’s personal point of view, the price of polyester yarn is easy to rise but not easy to fall. The price of raw materials is quite high, which is naturally a good thing for the weaving market.
From the perspective of the overall environment:
China-U.S. trade eases, first-phase economic and trade agreement signed this week
On the last day of 2019, U.S. President Trump tweeted: , on January 15, he will sign the first-phase agreement with high-level Chinese representatives at the White House, and later he will go to Beijing to start negotiations on the second-phase agreement. On January 9, the Ministry of Commerce also stated that the Chinese delegation will visit the United States from the 13th to the 15th to sign the first phase of an economic and trade agreement with the United States. The teams from both sides are maintaining close communication.
As we all know, the most important reason for the decline in the textile market in 2019 is In addition to overcapacity, there is Sino-US trade. The U.S. has repeatedly changed its attitude, which has seriously affected the export situation of foreign trade companies. One company once said that its U.S. orders were suspended indefinitely due to tariff issues. Not only foreign trade, but also domestic trade is deeply affected by it. There are always your customers to export. Now Sino-US trade has finally achieved substantial benefits, which is a major boost to textile companies. At this time point, most weaving companies have entered holiday mode and basically no longer accept orders. However, after the beginning of the new year, we will usher in the “gold, three, silver, and four” of the traditional textile industry. The US orders that have been backlogged for a year may be “Gold, three, silver and four” will break out in a concentrated manner. If the negotiations for the second phase of the agreement can go smoothly, the market conditions next year will surely ease significantly.
RCEP is expected to be signed in November 2020, and textile exports may reverse the decline
The so-called RCEP, It is the Regional Comprehensive Economic Partnership Agreement signed by 10 ASEAN countries and 16 countries including China, Japan, South Korea, Australia, New Zealand, and India.
In 2019, China’s textile foreign trade exports encountered a “cold winter”. Under this situation, Southeast Asian countries such as Vietnam and Cambodia have become investment hot spots and transit stations for China’s exports. Although Southeast Asian textiles currently have a relatively sufficient labor force, their infrastructure and technical levels are weak. Once the agreement is signed, the complementary advantages of the textile industries between China and Southeast Asian countries will be more obvious. China’s textile raw materials, gray fabrics, and fabrics can be sold at a lower price. The cost is transported to Vietnam, Malaysia and other places for processing, and the local labor advantages are used to make garments for export.
At the same time, for developed markets such as Japan, South Korea, Australia, and New Zealand, after the establishment of RECP, textile export tariffs will be further reduced, and Chinese textiles will have stronger competition than now. force. Against the background of Sino-US trade easing and the signing of PECP, this year’s foreign trade market will also be promising.
At the end of the chat, Mr. Shen still said that he did not want to hold on anymore. After all, the risk of doing business was too great. He did not want to experience the market situation last year again. If there was a chance, he would still choose demolition. This may be the idea of Mr. Shen alone, or it may be the idea of countless textile people.
But for the textile people who have not given up until the new year, the editor believes that as long as there is hope, you will still continue to work. The new year still has the same wish: the textile market can be expected to come true!
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