On July 27, the RMB exchange rate, which had been trading sideways for many days, fell sharply, hitting a new low since April. As of the close on the afternoon of the 27th, the onshore RMB had fallen by more than 200 points during the day, hitting as low as 6.5133; the offshore RMB fell below the three levels of 6.49, 6.50, and 6.51 in a row, hitting as low as 6.5210. On July 28, the onshore RMB exchange rate against the U.S. dollar opened. It fell nearly 50 points, approaching the 6.51 mark. At the same time, the offshore RMB fluctuated higher against the US dollar, rising above the 6.52 mark. As of 14:40 on July 29, the onshore and offshore RMB fell back to 6.4724 and 6.4756 against the US dollar respectively.
As we all know, the appreciation of the RMB is conducive to imports, not Conducive to exports. For our textile foreign trade export enterprises, changes in exchange rates are not just a matter of profit, but may often mean losses or profits. The RMB exchange rate against the U.S. dollar has continued to strengthen since April this year, and the RMB exchange rate rose sharply again after May Day. The exchange rate once rose to 6.35. Many textile foreign traders who took orders before and after the year did not settle the exchange in time and missed the opportunity. Faced with the appreciation of the RMB, they could only bear the losses with “tears”. The exchange rate returned to around 6.5 at the end of July, which is of great significance to textile people who are in the early stage of the peak season.
The depreciation of the RMB has given respite to foreign trade orders
Although the overall textile market has been in a state of decline in recent months The market is in the off-season, but the price performance of some products does not look like what it should be in the off-season. The first is the price of textile raw materials. The various specifications of polyester filament have increased by more than 10% compared with the prices that were still in the promotion cycle on June 22. There have been various price increase notices for spandex prices. Compared with the prices in January, the prices of 20D and 40D spandex commonly used in the market have all increased by more than 100%, and the two specifications have doubled.
On the other hand, shipping costs have soared. Container pressure, poor transportation turnover, and port congestion caused by overseas epidemics have not yet shown any signs of effective relief. The transportation dilemma has not changed substantially. The basic spot rate to the U.S. West Coast is $6,564 per 40 feet, up 12% from last week, while to the East Coast is $10,503 per 40 feet, up 7% from the previous week. Since April this year, container shipping capacity on international routes has been in short supply. Freight rates have increased approximately five times compared with the same period in 2019. At the same time, it is still difficult to find a container.
In the context of various price increases in textile foreign trade Next, the depreciation of the RMB is undoubtedly a timely help. Especially for orders quoted at the exchange rate of 6.35 two months ago, most of these orders have been completed and the payment will be received gradually. According to the current exchange rate of around 6.5, the profits of textile workers have undoubtedly expanded invisibly. However, the changing exchange rate makes it difficult to accurately grasp the next trend, especially since there is a long time lag between the quotation and order operation of textile foreign trade.
The peak textile season is approaching, foreign trade quotations need to be cautious
The current domestic textile industry is Relying on exports, especially the European and American markets. In 2020, my country’s exports of various textiles to the EU exceeded 360 billion yuan, and its exports to the United States were 352 billion yuan. In the three months of the fourth quarter, exports to the EU and the United States were 99.5 billion and 94.4 billion respectively, accounting for 28.3% and 26.2% of the total exports for the year. In other words, textile foreign trade exports in the fourth quarter accounted for a relatively important share of the year.
July is coming to an end, and August is just around the corner. Most of the foreign trade orders we quote at this time are operated or exported and collected in the fourth quarter. , then the number of order quotes during this period will naturally not be small. But we must not be too dismissive of fabric quotations just because the RMB exchange rate in front of us is good.
The recent wave of RMB devaluation is mainly due to the rising risk aversion in the market, which affects the performance of the capital market, triggers fluctuations in the RMB exchange rate, and puts the global financial market into a risk aversion mode. If the Federal Reserve continues its “hawkish” stance, market risk aversion may rise again and push up the dollar; if the Federal Reserve continues its easing state considering the potential uncertainty of the rebound of the epidemic, then the risk sentiment in the financial market will become stronger. The U.S. dollar may enter a downward trend.
The new “Delta” currently appearing at home and abroad “The virus has made governments of various countries more competitive, and there is a high possibility that financial markets will continue to be loose again. In other words, the probability of the RMB strengthening and appreciating in the future still exists. If the foreign trade quotation is based on 6.5 at this time, in addition to rising costs during the peak season of the fourth quarter, textile workers may have to pay an additional exchange rate loss.
In fact, changes in exchange rates mostly affectAll of them are pre-quotation and operation orders, and there is still great uncertainty about the impact of later orders. Therefore, textile workers still have to be cautious when facing favorable exchange rates. After all, our order operations have a long cycle. In today’s international environment, the exchange rate may undergo earth-shaking changes in two or three months.
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