At the meeting between the heads of state of China and the United States on June 29, the two heads of state agreed that China and the United States would restart economic and trade consultations on the basis of equality and mutual respect. The United States has stated that it will no longer impose new tariffs on Chinese exports. The economic and trade teams of the two countries will discuss specific issues.
Stop, stop! The protracted Sino-US trade war
On March 22, 2018, Trump announced that he would impose large-scale tariffs on US$60 billion of Chinese goods and restrict Chinese companies from U.S. investment and mergers have kicked off the current round of Sino-U.S. trade war.
On May 19, China and the United States issued a joint statement on bilateral economic and trade consultations in Washington. The two sides agreed to take effective measures to substantially reduce the U.S. trade deficit in goods with China.
On July 6, 2018, the U.S. Customs and Border Protection announced that the United States would start processing the first batch of 818 people on the list starting from July 6, local time (noon on the 6th, Beijing time). A 25% import tariff will be imposed on Chinese goods worth US$34 billion in several categories.
At noon on the same day, China’s Ministry of Commerce stated that China would also impose an additional 25% import tariff on U.S. products of the same size on the same day.
In December 2018, the United States suspended tariff increases on a $200 billion list of goods. China and the United States started new trade negotiations, and both sides remained optimistic.
On May 9, the U.S. government officially announced that starting from May 10, 2019, it would impose additional tariffs on a list of US$200 billion worth of goods imported from China, with the tax rate increasing from 10% to 25%. %.
On May 13, the Office of the United States Trade Representative (USTR) issued an announcement that it plans to impose tariffs of up to 25% on US$300 billion of Chinese products exported to the United States.
On June 29, 2019, the United States stated that it would no longer impose new tariffs on Chinese exports and that China and the United States would restart economic and trade consultations on the basis of equality and mutual respect.
It can be said that the Sino-US trade war has been on and off and is protracted.
What impact will it have on the textile industry?
This meeting between the heads of state of China and the United States reached a phased result. The United States stated that it would not impose new tariffs on Chinese exports, with tariffs on US$300 billion. If the threat is eliminated, what impact will it have on the textile industry?
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There is room for price increase! The hot market for polyester is just around the corner
On June 18, the heads of state of China and the United States exchanged phone calls and agreed to meet at the G20 Summit in Osaka, which brought great benefits to the market. Coupled with the recent tensions in Iran, international oil prices have begun to rise.
In terms of price, driven by huge gains, the prices of polyester raw materials, whether PTA, ethylene glycol, PX or polyester filament, have begun to rise sharply in the past two weeks.
In terms of inventory, according to statistics from China Silk City Network, the overall polyester market inventory is now at 11 -20 days; in terms of specific products, POY inventory is concentrated in 4-8 days, FDY inventory is around 10-15 days, and DTY inventory is around 18-23 days.
It can be said that the current polyester filament inventory is at a very low position, with sufficient room for price increases. Stimulated by the good news, the price of polyester filament is likely to continue to rise, and polyester production and sales may usher in a new peak.
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Good news, the RMB may further Appreciation
After the United States unilaterally announced an additional 200 billion tariffs on May 10, the RMB exchange rate began to depreciate sharply.
After the phone call between the heads of China and the United States on June 18, the RMB began to appreciate significantly. That night, the RMB It rose 400 basis points intraday.
After this good news comes out, the RMB exchange rate is expected to start to appreciate again.
For textile foreign trade companies, the consequences of RMB appreciation are mixed. But generally speaking, exchange rate fluctuations bring more questions about profits or less. But if foreign trade relations are very tense, it becomes a question of whether there are orders or not.
During the interview, some textile foreign trade companies also said that it is not good for the exchange rate to be too high or too low, and a stable exchange rate is the most beneficial to them. A stable exchange rate also helps them calculate costs and avoid unnecessary risks caused by exchange rate fluctuations.
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US demand is suppressed, and exports to the United States are expected to pick up
The trade between China and the United States has eased, and the threat of US$300 billion in tariffs has temporarily disappeared, which is good news for both China and the United States.
In the international market, the cost-effectiveness of Chinese textiles is not yet available Corresponding substitution. Although judging from the current overall trend, the textile industry is moving towards Southeast Asian countries, but due to problems such as the quality of workers, supporting industries, and technical levels, the only country that can guarantee both the quality of textiles and the cost-effectiveness is currently China.
According to national customs statistics, in May this year, while China’s overall exports increased, China’s exports to the United States were decreasing. However, according to local media reports in the United States, local American companies did not Without a good alternative textile producing country, it can be said that a large amount of textile demand is being suppressed.
With the good news this time, perhaps textile exports to the United States will usher in a new wave in the near future. A wave of peaks.
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Weaving market injection Booster! The phenomenon of reduced operating hours is expected to be alleviated
Affected by the overcapacity of water-jet looms and the overall sluggishness of the terminal garment industry, the inventory of conventional products in weaving enterprises has increased significantly compared with previous years. The increase.
Recently, due to factors such as rising raw material prices, traders have begun to take more goods. Although the inventory of weaving companies is now slightly lower than the previous highest point, it is still at a high level . Affected by the weak signs of market recovery in the later period, more traders choose to wait and see.
The successful meeting between the heads of state of China and the United States will most likely continue to push up raw material prices, and it may also It has brought new demand to the market and injected a boost into the weaving market.
On the one hand, traders may take goods more frequently in the future; on the other hand, The inventory pressure of weaving enterprises has been relieved, and the previously rumored reduction in production capacity may be improved.
Be prepared for danger in times of peace and remain cautiously optimistic
The successful meeting between the heads of state of China and the United States eased the trade friction between China and the United States, which is a major benefit to the market. But for textile companies, we cannot be blindly optimistic.
First, the general environment of oversupply of conventional products in the market has not changed. The number of water-jet looms in peripheral areas will grow at a high rate until 2020, and the overcapacity situation will only get worse in the next 1-2 years. The easing of Sino-US trade relations may bring about a certain amount of exports, but the increase in exports from one country alone cannot offset excess production capacity.
Second, the attitude of the United States may continue to change. At last year’s G20 Buenos Aires summit, the heads of state of China and the United States had a meeting and reached some consensus. However, in the end, tariffs of US$200 billion came. Therefore, while expressing joy at the outcome of this meeting, Don’t let your guard down either.
For textile companies, on the one hand, the successful meeting between the heads of state of China and the United States is a solution to inventory, A good opportunity to develop new customer sources may be able to reverse the decline since the first half of this year to a certain extent;
On the other hand, good products are the core competitiveness of enterprises, and textile enterprises We should improve the quality of our products and make long-term plans to face greater challenges in the future. </p
