The Wolf Has Come! The Market Orders Are More Cautious, And The Textile Industry Will Usher In The Most Dismal "Busy Season". How Do You Deal With It?

In 2019, more than half of the bosses in the textile industry have gone through the past six months, which can be regarded as a rough and bitter journey. Today, it is hard to get through the most insipid market in 7 and August. For the upcoming September peak season, textile people are looking forward to the tide of orders.

Indeed, in the near future, some of the grey goods factories queued up, and the news of the explosion of the pressure vessels in the dyeing factory was bubbling up in the textile circles, and the market confidence has recovered a lot. Recently, however, there have been some discordant factors in the clamour of the market.

The trade conflict between China and the United States has upset the original plan. One dare not go down and do not dare to place orders.

This year, the textile industry is facing too many challenges. The impact of Sino US trade friction is undoubtedly the biggest "black swan", and the textile foreign trade enterprises' receipt has been affected to varying degrees. Now, during the peak season, the original textile market is taking advantage of the recent partial improvement in the domestic market. It may be able to move smoothly to the peak season, but this rhythm seems to have been disrupted again.

One industry insider responded that the United States decided to increase taxes by 10% in the early stage, and it could be digested temporarily through domestic factories' profits and customers' burden and the depreciation of the renminbi. But last Friday, the trade conflicts between China and the United States were disrupted, and the original feasible plans were all disrupted. In the future, if the tension between the two sides could not be suppressed, the environment of garments exported to the United States would be even worse, and customers would not dare to place orders. Even if the order was placed, the factories would not dare to make the list.

At the same time, banks have tightened loans, and some spot prices are obvious. Stock pressure is bigger, and capital withdrawal is slower. Textile enterprises have not much hope for the market, and some of the high prices of stocks and stocks are constantly decreasing, making the market more chaotic. The upstream market situation resulted in the two stage differentiation of printing and dyeing Market in the peak season, and a large number of orders in a few printing and dyeing factories. Most factories were not open enough, and subsequent orders were lacking.

September 1st is the day when China and the United States raise taxes on each other. The United States impose tariffs on China's $300 billion commodity. "The wolf is still coming". The impact on exports of textiles and clothing should not be underestimated. Although the Ministry of Commerce recently revealed that the economic and trade teams of China and the United States have been communicating with each other, they believe that they are not aimless. At the same time, it also means that there may be new opportunities for tariff incidents. Many signals indicate that the initiative has returned to China. But there is no difference between trade and war, and the market will be more cautious about orders.

According to customs statistics, the total export of textile and clothing in China was 151 billion 740 million US dollars in 1-7 months of 2019, a year-on-year decline of 1.5% (3.71% in 2018, 2018), of which clothing exports declined by 3.9%. What is even more disturbing is that in the first half of the year, China's exports of textiles and clothing to the United States, the European Union and Japan decreased by 0.7%, 4.2% and 4.7%, respectively.

At the same time, China's decline in the export of textiles and clothing to the EU, Japan and other developed countries is even more strange and uncertain. According to statistics, in June, the EU's imports of clothing to China decreased by 10.5% compared with the same period last year, while the total import volume decreased by 7.9% in the 1-6 months of this year. But at the same time, the EU's imports to other countries increased by 2.1%. The EU did not produce trade disputes with China and broke out trade wars. Why did the import of Chinese textile products fall sharply?

The factors such as the sharp fall in the euro exchange rate and the rise in the price of Chinese clothing are all far fetched. It is the key to cater to the US government's "blocking" the wishes of Chinese enterprises; the fluctuation of exchange rate has increased, and the spinning and weaving industry has become more and more difficult to meet orders.

Since 2019 (as of August 26th), the central parity of RMB against the US dollar has depreciated by 2.7%, while the domestic (CNY) and offshore (CNH) yuan has depreciated by 4% and 4.1% respectively against the US dollar. In particular, since August, the CNY has been derogating quickly, once depreciated to 7.15, creating the lowest point of the bilateral exchange rate between the RMB and the US dollar since 2008, and with the expectation of the US Federal Reserve's "further interest rate cuts" in September, while the Fed's holdings of treasury bonds imply loose and overweight, the RMB exchange rate is facing multiple shocks, fluctuations or widening.

The fluctuation of RMB exchange rate is also a major influence on textile enterprises. A foreign trade company official said, "at the time when the exchange rate was stable, foreign exchange settlement was carried out at that time. At that time, the exchange rate was stable, and the possibility of further decline was not great. Therefore, at the time of 7.05 exchange rate, the foreign exchange settlement was made, and when we saw the current exchange rate, we really regret it." If the example is $10 thousand, the boss will lose 1000 yuan in vain. For some low-end products, a small number of single profit is 1000 yuan. Because of exchange rate fluctuations, cloth boss is likely to lose profits or even lose money. Like the roller coaster, the RMB exchange rate is also a test for settlement of foreign exchange. If we fail to grasp the opportunity, we may lose in vain.

Environmental regulation has brought about an increase in the boom, but also worries about capacity. Market sales fear will boost productivity.

From the beginning of 17 years, the water jet weaving industry has entered a period of three years of change. Under the pressure of environmental protection, the water jet looms in Jiangsu and Zhejiang provinces are largely eliminated, resulting in the market being ignited last year. New factories such as northern Jiangsu, Anhui and Jiangxi have sprung up this year and production capacity has increased significantly. As one industry source said, Jiangsu and Zhejiang eliminated 100 thousand looms in 3 years, but the external capacity was blowout 200 thousand.

A textile enterprise said: "now the loom production capacity is coming up, and the impact on us is relatively large. Originally, we are small profits but quick turnover, running volume, and more market supply, and the competition is bound to be more intense." At the same time, he also reminded the market under the current peak season: "once the sales volume comes up, the more powerful the productivity will be, the less the textile companies will be."

Amateur looking at bustling, professional looking at the doorway! In Xiaobian's view, it's a blessing or a curse, but it is clear to oneself. Although the market orders have been resumed at a time, the severe internal and external trade environment has passed a signal - the market is bad. Business is hard to do!