A textile source revealed: A customer stocked up 5 million meters of cotton clothing in seven warehouses. He thought he was one step ahead, but he didn’t expect to sell any of them!
The owner of a contract processing factory in Changshu said: Last year, he made a gold mink velvet that became a hit, and ended up hoarding 5 million worth of goods. However, no one cared about it this year. , sold at a cost of 50 yuan and a disposal price of 39 yuan…
This is what textile people experienced in the past 2019!
In such a special year, what “unforgettable” things have the textile people experienced?
1. Overcapacity – Peripheral weaving factories are “proliferating everywhere”, and overcapacity is plaguing the market
Since the beginning of this year, “overcapacity” has become an indelible pain in everyone’s heart. Many textile bosses who have opened factories in peripheral areas also have a headache holding a large amount of inventory.
As Jiangsu and Zhejiang regions eliminated backward production capacity of water-jet looms under environmental protection measures, in order to meet production needs, weaving enterprises began to move to peripheral areas, and enterprises in southern Jiangsu moved to northern Jiangsu. Transfer, enterprises in Zhejiang and Shanghai are moving to Hunan, Hubei, Jiangxi and other places.
And according to the requirements of local investment promotion, hundreds of new products are launched, so As a result, the originally shrinking production capacity experienced a blowout one year later, that is, in 2019.
Take the textile industry in Anhui Province as an example. In 2018, yarn output was 1.276 million tons, a year-on-year increase of 15.6%; cloth output was 970 million meters, a year-on-year increase of 19.4%; clothing output was 940 million pieces , a year-on-year increase of 1.4%; chemical fiber output was 396,000 tons, a year-on-year increase of 10.5%. It can be seen that the entire industrial chain is expanding, especially the output of raw materials and gray fabrics, with growth rates exceeding 10%.
The sharp rise in production has laid the groundwork for overcapacity! On the one hand, a large number of gray fabrics have been put into the market; on the other hand, the terminal digestion speed has slowed down significantly. “In the past two months, we have maintained an operating rate of about 50%, just to destock well before the year. We feel that the pressure will be relatively high in the first half of next year.” said Mr. Chen, who runs a factory in northern Jiangsu.
2. If you don’t lose money, you will make a profit – from “making money every day” to “barely making a living”, the profits of the textile market have shrunk sharply
How to describe this year’s textile market? Most textile people would say, “The peak season is not busy, the off-season is very weak, and business is not easy to do!” Due to poor market performance, the production capacity of the industry chain itself The oversupply dilemma is difficult to solve, and the industry’s own profits are getting lower and lower. Compared with the highest point last year, profits have been reduced by more than half!
Take the most common water-jet loom weaving the most common polyester taffeta as an example:
2018 , you can make 160 yuan a day, a small manufacturer with 100 looms can make 16,000 yuan a day, and a profit of more than 5.8 million yuan a year, just make money! In 2019, the machine rate of polyester taffeta has dropped to 20-30 yuan or even lower, and the capital is guaranteed!
In addition to the lack of bright spots in the market itself, the comprehensive costs of manufacturers are getting higher and higher this year. In an era of skyrocketing prices, expenses such as labor, water, electricity, and rent are also rising. “This year the rent of our factory has risen to 300 yuan/square meter. This has been rising for two consecutive years!” said Mr. , already satisfied!”
3.Trump’s Twitter is here! ——China-U.S. trade friction continues, and foreign trade bosses are generally “difficult”
For foreign trade companies, the most fearful thing this year is seeing Trump tweet. After all, Trump, who possesses the skill of “changing faces in Sichuan Opera”, can make market participants “scared” every time he tweets. After all, Sino-US trade friction has become an important factor affecting the entire textile industry.
The Sino-US trade friction began when the United States launched a steel and aluminum investigation into China in March 2018. Since then, it has gradually implemented tax increases and imposed additional tariffs on most of China’s commodities. It ranges from 5% to 25%. After a year and a half of separation and resumption, on December 13, Sino-US trade seemed to usher in a substantial breakthrough: on the basis of the principles of equality and mutual respect, the two sides have reached an agreement on Sino-U.S. The text of the first-phase economic and trade agreement was agreed upon.
Many textile people have reported that they have had a more difficult time this year. Affected by the uncertainty of Sino-US trade relations, their share of the US market has shrunk significantly, and the other parties are more cautious in placing orders. Some original orders not only disappear directly, but are also temporarily canceled, causing certain losses to the company.
A foreign trade boss said, “Since the beginning of this year, business has been slow due to the impact of the Sino-US trade friction. We are actively exploring markets in other countries and reducing the proportion of American customers.” Regarding next year’s foreign trade In the market, most textile bosses still hold a pessimistic attitude. On the one hand, Trump himself has many unstable factors. On the other hand, the order transfer phenomenon in Southeast Asia is now more serious, and the market cake itself is shrinking.
Four. Breaking 7! ——The RMB exchange rate “broke 7”, which is a great benefit to exports
In the Sino-US trade war, Trump “changes orders day by day”This makes the situation confusing, which also leads to a “roller coaster” trend in the RMB exchange rate.
In August, Trump announced “the remaining 300 billion in Chinese exports to the United States.” After the news that an additional 10% tariff will be imposed and will be implemented on September 1, 2019, the onshore RMB fell directly below the 7 integer mark against the US dollar, which was the first time since December last year.
Since the beginning of this year, “black swans” have been flying frequently in the foreign trade market. China has depreciated the RMB exchange rate against the US dollar in response to market pressure to help export companies hedge against the pressure of tax increases.
According to incomplete statistics, foreign trade orders this year decreased by 50% compared with the same period last year. While orders have decreased, profits have also dropped from 20% to 10%-15%. The depreciation of the RMB will be a great benefit to exports. Generally speaking, for every 1% depreciation of the RMB, the sales profit margin of the textile and apparel industry increases by 2% to 6%, and companies can directly benefit from the depreciation of the RMB.
The person in charge of export of a textile enterprise in Wujiang region said: “In the past, when the exchange rate fell, customers may have encountered price pressure. However, we have experienced an extraordinary period since the middle of last year, and the price pressure phenomenon has improved slightly. Now, Because there are many uncertainties in the foreign trade market, we basically dare not accept long-term orders. We will be more cautious in accepting foreign trade orders in the future. Compared with depreciation, we prefer a stable exchange rate.”
5. Made in Vietnam – Through Southeast Asia, the biggest winner in trade friction is Vietnam!
In the stalemate situation between China and the United States, many Chinese foreign trade exporters, freight forwarders and customs brokers are considering using third parties to illegally re-export trade through Southeast Asian countries. To avoid the risk of additional tariffs imposed by the United States, Vietnam is the first choice.
“The biggest winner in trade friction is Vietnam” has become a quite popular saying this year. Judging from economic data, this is indeed the case.
In the first 11 months of this year, China’s exports to Vietnam increased by 22%; on the other hand, in the first 11 months of this year, Vietnam’s exports to the United States increased by 27.9% year-on-year to 55.6 billion. USD, among which electronic products, textiles, mobile phones and parts, and electromechanical equipment increased by more than 40% year-on-year.
Mr. Zhu, the boss of a textile foreign trade company, said: “We can still take orders from the United States this year because our customers have their own garment factories in Vietnam, so adding The imposition of tariffs will not have a big impact on everyone.” Because of this, since the start of the Sino-US trade war, Vietnam has become a “tax haven” for domestic trade bosses. The United States has put pressure on Vietnam and repeatedly urged Vietnam to strictly inspect exports that “wash their origins”.
In the second half of this year, in order to prevent some companies from exporting to the United States through Vietnam. The Ministry of Industry and Trade of Vietnam has frequently issued changes to the standards for “Made in Vietnam” (origin) and cracked down on “origin washing.” This has also set up more obstacles for Chinese textiles to be exported from Vietnam to the United States. Next, through Southeast Asia, it will also You may not save money!
6. The probability of a cold winter this year is 0 – “High inventory” Dragging down the clothing giants, “warm winter” makes things worse
The textile market has always been “depending on the weather”, especially for autumn and winter fabrics, where weather factors are more important. In November, the China Meteorological Administration released the latest news: the probability of a cold winter this year is almost zero! Once again, the already mediocre clothing market has become even worse!
Because most clothing companies expected a cold winter last year and stocked up on cold-proof clothing, the result was a warmer winter than expected. With the arrival of the epidemic, the planned rhythm has hit the bottom. Manufacturers have a large amount of cotton clothes and down jackets on hand and it is difficult to realize them, and it is difficult to open up sales in the domestic market.
This year, many well-known clothing companies have closed stores and sold off their inventory. Take La Chapelle, the first listed clothing company with “A+H” shares in China, as an example. In the first half of this year, it lost 500 million, 2,470 stores were closed, and its men’s clothing subsidiary planned to go bankrupt and used unprecedented discounts to reduce inventory.
In addition, clothing factories that were originally very busy during Double Eleven and Double Twelve are also experiencing a lack of orders this year. Many clothing factory owners said that it is precisely because consumers are not satisfied with the warm winter. It is expected that the purchase of cold-proof clothing will be reduced, resulting in the phenomenon of idle workers and no orders for processing factories during the busy season.
A textile source revealed: A customer stocked up 5 million meters of cotton clothing in 7 warehouses. He thought he was one step ahead, but he didn’t expect to find any. sell away! The owner of a contract processing factory in Changshu also said: Last year, he made a gold mink velvet that became a hit, and ended up stocking up on 500 items. As a result, no one took notice this year, and he sold them at a cost of 50 yuan and a disposal price of 39 yuan…
In fact, in addition to the above keywords, there are still many events that have a certain impact on the market. For example, in the first quarter, affected by the explosion in the chemical industry park, the price of disperse dyes went crazy. has risen, resulting in a sharp increase in printing and dyeing costs for traders; and environmental protection and safety supervision are still on the way, which will still have a greater impact on water spraying and finishing…
Anyway , 2019 is indeed the most difficult year in recent years!
2020 may be a year that people look forward to?
What do you think?
, the impact on water spraying and finishing is still relatively large…
In any case, 2019 is indeed the most difficult year in recent years!
2020 may be a year that people look forward to?
What do you think?
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