Intensive Research, Guangdong, Zhejiang, Shandong Textile Enterprises, Demand Inventory, Etc.

Recently, China cotton net and China cotton trade coordination research group visited some textile and garment market and some industrial cluster enterprises in Guangdong, Zhejiang, Henan and Shandong.

1. Guangdong

Guangzhou's major textile and garment market research shows that the downstream market has improved somewhat than last month, but there is still a clear gap compared with the peak season. As follows:

First, the wholesale market of clothing in Zhongshan, Guangzhou, was popular before, but now it is very crowded. This phenomenon is caused by the decline in demand resulting from the economic downturn, as well as the transformation of business models and government regulation and control.

Two, during the peak season, the printing and dyeing plants are stacked with warehouses and have a long list. However, at present, most of the research enterprises reflect that the printing and dyeing plant in Guangdong has less than 60% start-up rate.

Three, for the intermediate products such as colored yarn, colored cloth, shirt cloth and so on, during the peak season, there will be successive explosions according to the clothing styles and fabric needs. This year, traders and processing plants say that there are only one or two explosions at the stage, and some traders even say they do not see any explosion.

Four, the surveyed companies believe that the inventory of their respective industrial chains is very large, whether the import yarn of the port, or the stock of colored yarn, grey cloth and clothing are all at a high level in history.

The downstream is pessimistic about the market as a whole. The survey industry called the industry the worst year. At the same time, most believe that there will be no improvement in the trend. The reason is that the global economy is down and demand continues to decrease. In particular, the US manufacturing PMI set a new low, the long and short debt yield upside down, and the sharp appreciation of gold all showed strong investor risk aversion. Coupled with the Federal Reserve's rate cut, it shows its pessimistic expectations of the US economy. At the same time, the downward pressure on China's economy is bigger, and the rate of starting cotton yarn and grey cloth is less than 50% even in the traditional peak season.

In addition, the trade frictions between China and the United States have reduced the impact of us orders. In August 23, 2019, the United States decided to raise the original tariff rate of 10% in September 1st to 15%, which contained textile and clothing products. Research shows that some orders from the US have been transferred to Southeast Asia in the early days, and the existing US orders are also required to reduce the price of products, and the US orders are running away.

China Cotton bank has coordinated the research group's industrial cluster research in Zhangcha, visited the Heng Heng Trading Market and some representative knitting enterprises, mainly understood the recent market situation and the difficulties in operation, and discussed with the Zhangcha government how to help the enterprises tide over the difficulties.

According to the introduction, the China Heng textile exchange market project, established in early January this year, is advancing orderly, and the government of Zhangcha is working hand in hand to build a 90 thousand square meter intelligent warehousing and logistics center. The aim is to build a large-scale international textile trading platform based on the strong global textile resources and build a large-scale international textile trading platform for warehousing, logistics, information services and value-added services. It will provide deep services for Zhangcha and the national textile enterprises. The platform is now gradually guiding online transactions based on the consolidation of offline business. The company has been established for only a few months and its business scale has reached hundreds of millions.

In terms of market prices, according to the responsible person, although the indicators in Zhangcha in the first half of this year are stable, but because of the lag of order processing in many textile enterprises, the data of some production indicators in the first half of last year are reflected in the order at the end of last year. The negative impact of trade friction between China and the United States since May has been relatively severe. At the lowest level, the average opening rate is only 30%, which is basically maintained at around 60% in the near future. In terms of product structure demand, the Zhangcha area showed the opposite trend from previous years. The demand for medium and low branches and medium and low grade yarn declined relatively little, but the high count yarn was rather difficult to do in the near future. The speculation was related to the "Pyramid" type of market demand structure, and the impact of the low disposable income of the residents caused by the downturn of the macroeconomic environment and the impact of consumer demotion.

Two, Zhengzhou, Henan

Recently, the China Cotton Textile Industry Association research group went to the Zhengzhou commodity exchange and TongZhou cotton industry research, aiming at the exchange of cotton yarn futures, supply and demand situation.

Deputy chairman of the Sino Cotton Association Xie Ye Chun said that since the launch of cotton yarn futures, it has attracted much attention from the industry. But the transaction is still not active at present. Compared with cotton, cotton yarn has certain product particularity. After the cotton is used as raw material, the textile enterprises can reduce the effect of quality difference through cotton blending, and if cotton yarn is not matched with the spinning factory order, it will be difficult for us to make use of it. On the other hand, the existing contract rules may also need further improvement or simplification, such as the proper extension of the validity period of warehouse receipts is conducive to promoting the participation of textile enterprises. In recent years, knitted fabrics have developed rapidly, accounting for more than weaving. According to market changes, appropriate adjustment of quality indicators may also expand the coverage. Although the rules have been modified several times, the cotton yarn futures are still in the exploratory stage, and it is very necessary to listen to the opinions of experts and enterprises.

After the market, Tonggang cotton industry Wei Gang min chairman said that the current Sino US trade friction has a greater impact on the industry, from the current perspective, double 11 brought about a slight rebound to support effective, stamina slightly less, compared with previous years, the peak season is not prosperous, the market is unlikely to rebound in 3 months. It is particularly important for textile enterprises to control risks at this time. Reserve cotton has now been reduced to low inventory. Timely rotation is very necessary. It is of great significance for adjusting the balance between supply and demand and optimizing the structure of the market. Any link in the cotton and cotton spinning industry chain needs to stand in a higher perspective and look at the development problems in a long-term perspective. We must not be short-sighted. We should do something to kill the goose that lays eggs, and do everything we can. The solution to the downstream problem is to solve our own problems.

Three, Shandong

On the 16-19 th of September, China Cotton Association went to Xuchang, Henan, Shandong, Heze, Jining, Zouping and other places to visit the textile enterprises, mainly to understand the current market situation and the production and operation of enterprises.

This visit mainly focuses on large and medium-sized enterprises, and some of the customers are relatively stable. The upstream and downstream enterprises are "warming up and developing together", maintaining normal operation and basically full load production. Some enterprises are affected by trade wars, and enterprises are slightly deficient in starting up. It is understood that the small business start-up enterprises around the survey is relatively poor.

Because of the complicated international trade situation and frequent adjustment of financial policies, the downstream customers are weak, and the downstream customers are cautious. Some enterprises directly export to the United States home textiles products orders have been greatly affected, enterprises actively looking for new orders in Southeast Asia and other regions, and vigorously explore the domestic market.

According to the survey, in the face of the current situation, most enterprises are actively adjusting their mindset, while ensuring normal production, and with full confidence, strive to "improve their internal strength", carry out a series of work such as "finding gaps and grasping shortages", "saving energy and reducing consumption from me" and so on. Some enterprises improve their employees' stability and get better results by taking more days off a week.

Four, Zhejiang

On the 19-20 th of September, China Cotton Association went to Jiaxing, Xinchang and other places in Zhejiang to visit a number of textile and textile machinery enterprises, and organized a forum to understand the production and operation of enterprises.

The main products of this visit are mainly ring spinning and air-jet spinning differential yarn products. At present, the visiting enterprises are operating normally, full load production, product inventory is in half a month to a month, and the product sales are gradually smooth in the last half month. For the current market situation, enterprises have expressed great pressure, but they have prepared well for the long-term war, and strive to improve product quality through technological transformation, strengthen staff skills training, and actively respond to challenges. Some jet vortex spinning enterprises are optimistic about the future development and have plans to increase capacity.

In terms of policy recommendations, the enterprises suggest that the state should maintain the internal and external cotton price difference within 500 yuan by means of macroeconomic regulation and control. Specific suggestions:

(1) increase the quota of 1% tariff import quotas or further reduce the sliding quota tax rate;

(2) at present, domestic cotton stocks are relatively large. In 2019, domestic cotton output is expected to be higher than that of 2018, and cotton consumption is lower than that of 2018.

(3) it is recommended that the cotton reserves be controlled within 3 million tons next year.