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    Early Warning: The Impact Of Tariff Increases, The Outbreak Of Midwest Production Capacity Will Be Concentrated This Year.

    2019/1/11 10:03:00 22

    TariffsMidwest Capacity

    In 2018, the market ended, and the market ended in gloom.


    According to statistics from the Cotton Exchange Center, this year has been the worst year since 2008. Of the 21 textile raw materials tracked, only two of them rose and increased by less than 6%, while the other 19 products fell. 9 of the raw materials fell, the national cotton fell 2.06%, and the outer cotton fell 10%. The specific rise and fall are as follows:


    Whether upstream polyester raw materials or downstream pure polyester yarn market, or close "comrade in arms" cotton, viscose, are mostly in a state of decline.


    But in any case, 2018 has been turned over, and 2019 has arrived. Recently, with the joint efforts of China and the United States, there are many positive signals on the trade level. For example, the United States announced that it would postpone the time of adding 25% tariffs to March 2nd, while China also procured 1 million 130 thousand tons of American soybeans. All indications indicate that Sino US trade frictions are moving closer to the positive side.


    Will textile opportunities in 2019 be in foreign trade?



    Trade Wars: the Levy of tariffs is like a "sword" hanging on the head of textile enterprises and trading companies.


    During the days near the Spring Festival, the days of chemical fiber weaving did not improve because of the easing of trade between China and the United States. Now the market of the entire weaving Market is a bit sluggish.


    Xiaobian believes that although the tariff concerns can be reduced after the temporary truce between China and the United States, the two sides are expected to reach a compromise to a certain extent. At least, the dangerous trend of China and the United States sliding towards the new cold war has been curbed. The phenomenon of "looting" to the US is expected to ease slightly in the fourth quarter. However, the effect of tariff increases will be concentrated in the first half of 19 years.


    Coupled with factors such as rising factor costs, increasing environmental pressure, financing difficulties and financing, the long-term operation of the industry will still exist. In 2019, the pressure of China's textile industry will increase over the past 18 years.


    While praying for the spring of foreign trade market, chemical fiber producers are more worried about the textile market in China next year.


    In 2016, the overall market of textile industry was in the boom cycle. While the volume and price of products have been raised, the profit margins of enterprises have increased significantly. Taking water jet looms as an example, in the 15 years when the market has not yet recovered in large scale, the net profit of a water jet loom per day is about 50-60 yuan, but in the 18 year 3-4 months, the machine platform rate has increased to 120-150 yuan / Taiwan. From the 16 to the first half of 18 years, the weaving Market is really "Crazy".


    The days of "winning the golden day" are too comfortable to win. So in the past two years, with the frequent environmental protection and strict administration in the southeast coastal areas, a large number of chemical fiber and textile people poured into the central and western parts of the country, where there was no headaches for environmental protection and shutdown, where the production cost was lower, and labor was cheaper there. For a time, a large number of chemical fiber textile enterprises in the Midwest horse racing enclosure, boosting the weaving capacity of the central and Western China has been leaping growth.


    The unknown textile industry in the central and western part of China has been rising rapidly almost overnight, and the huge textile cluster market is beginning to scale. The weaving industry, which originally thought that the production capacity would be reduced due to environmental protection, actually brewed a horrible productivity counterattack.


    In 2018, near the end of the year, recently, we discussed the factors affecting the trend of next year's market in the group. Some people said that the trade war, some said that the raw material side's skyrocketing and plummeting, and others said that the PX's production was going on. The biggest negative factor in the weaving market next year is likely to be a concentrated explosion in the Midwest capacity.


    The unknown textile industry in the central and western part of China has been rising rapidly almost overnight, and the huge textile cluster market is beginning to scale. The weaving industry, which originally thought that the production capacity would be reduced due to environmental protection, actually brewed a horrible productivity counterattack.


    In 2018, near the end of the year, recently, we discussed the factors affecting the trend of next year's market in the group. Some people said that the trade war, some said that the raw material side's skyrocketing and plummeting, some people said that PX's production was... And next year, the biggest negative factor in the weaving Market is likely to be a concentrated outbreak of Midwest productivity.


    The cake is so big. How should we divide it?


    A large number of water jet looms in Jiangsu and Zhejiang provinces have been transferred to areas such as Anhui, Hubei, Hunan and Jiangxi, benefiting from the policy support of the local government. The looms in the past have increased exponentially. Most of these looms are produced in low-end grey fabrics, and the current production capacity is oversupplied. With the surge in transfer capacity, the cake is not enough, and the competition will be more intense.


    In 2019, these transfer capabilities will begin to take place in the Midwest, so in 2019, it is a test for the grey cloth manufacturers in Jiangsu and Zhejiang provinces.


    Intensifying competition and survival of the fittest


    Although production capacity will be put into operation in the Midwest in 2019, it is subject to the lack of a complete industrial chain system and imperfect sales channels in the Midwest, so the product will eventually return to the coastal areas.


    In addition, the amount of funds invested by the chemical fiber and textile enterprises to enter the Midwest is large, and many enterprises are carrying certain debts. Therefore, they will surely take the rapid return of funds as the top priority. It is foreseeable that the market competition in the 19 years will be extremely tragic. Low price competition is a battle that hurts the enemy one thousand, but it is a war that has to be fought. Low price competition will also lead to a new round of elimination tide.


    Think of a sentence written by a textile worker in a circle of friends: "2019 will be the most difficult year in the past ten years, and 2019 will be the best year in the next ten years. "


    Chemical fiber textile, hope to prepare for the battle.

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