Global Textile Orders Fell By 31%, And The Textile Industry Faced 4-6 Months Of Hard Times.

Last week, the International Textile Manufacturers Federation (ITMF) recently conducted a second survey of its members and their Affiliated Companies and associations (March 28th to April 3rd) to understand the impact of the new crown pneumonia epidemic on the global textile chain. About 700 companies took part in the survey.

The second survey shows that companies around the world have largely cancelled and / or postponed orders. Globally, orders have fallen by 31% on average, ranging from 20% in East Asia to 41% in South America. Companies around the world expect 2020 turnover to be significantly lower than in 2019. On a global average, turnover in 2020 is expected to be 28% lower than in 2019, with the expected turnover in South Asia going down by 15% while Africa's companies are expected to fall 45%.

Prior to this, ITMF's first survey (34 companies in from March 13th to 25th and 2 National Textile associations) showed that companies in all parts of the world suffered a lot of cancellation or postponement, and orders fell by an average of 8%. Orders fell from 4% in South America to 13.3% in Africa. The average decline in North America is expected to be 7.5%, and European companies are expected to fall by 17.5%.

It should be noted that three weeks ago, some areas were not fully affected by the epidemic. The new figures of orders and turnover show the huge impact of this demand shock on the textile industry around the world. The uncertainty of the duration of the crisis has brought heavy pressure on the industry.

Companies around the world have stressed that the main challenge now is the lack of current demand and / or worry that future demand will fall sharply and lack liquidity. Companies that produce fibers, yarns, fabrics and end products with health care and protection functions will see new opportunities.

Although, after more than 2 months of continuous fighting, China's new crown disease epidemic has achieved a periodic victory, and all walks of life in China have been resumed and resumed production. However, due to the further spread of the epidemic abroad, the domestic textile industry, which is mainly exported to foreign trade, has brought greater uncertainty. At present, with the continuous spread of foreign epidemics in the WeChat circle, the current order of enterprises has been reduced, and even in April there is no single predicament. What is the truth?

According to China's Cotton Association, the fifth week resumption of domestic production showed that on March 30th, -4, 5, affected by the global epidemic, the confidence of cotton textile enterprises was once again frustrated and various business indicators declined. The proportion of the start-up enterprises in the cotton textile industry and the number of workers who have resumed work accounted for the proportion of the number of workers in the normal production situation, and the utilization rate of the capacity decreased compared with the fourth week. The expectation for the first half of 2020 is still not optimistic, and the confidence of the enterprises is being tested.

Fig. 1 start up and personnel arrival of cotton textile enterprises

　　 Fig. 2 order recovery of cotton textile enterprises

　　 Figure 32020 the first half of the year sales and export volume compared to the same period last year forecast.

　　 Table 1 capacity utilization ratio of cotton textile enterprises

　　 Table 2 cotton textile industry cluster to resume production

　　 From the chart above, the rate of industrial cluster starts to drop by 5 percentage points compared with last week, and the degree of influence of enterprises under the regulation is greater than that of the regulated enterprises. The operating rate of enterprises under the regulations and regulations is 3 and 5 percentage points lower than that of last week.

80% of cotton textile enterprises indicated that the shortage of orders was the main problem faced by enterprises in the process of resumption of production and resumption of production, and 62.9% of enterprises said they were facing customers' cancellation or suspension of orders. Among them, 75% of enterprises export orders less than half of the normal level.

Enterprises believe that the negative impact of the epidemic on the sales and export of the cotton textile industry in the first half of the year will be more serious than that in the first quarter, and the market confidence will be significantly reduced. 50.5% of enterprises believe that sales revenue in the first half of this year will be reduced by more than 20% compared with the same period last year, accounting for 61.8% of the total export volume which will be reduced by more than 20% over the same period last year. It is estimated that the global tension of the epidemic will last for 3-4 months, which will affect foreign trade enterprises for at least 4-6 months.

Affected by the outbreak of the global epidemic, the order problem was rapidly transmitted in the industrial chain. At first, foreign trade orders were affected. With the export sale of some enterprises, the domestic demand market was also rapidly saturated, and the production and marketing of the enterprises were hindered.

1, orders are seriously inadequate, and export orders are basically suspended or cancelled due to the outbreak and exchange rate effect. Domestic orders are mostly orders placed at the end of last year. Recently, due to the falling prices of raw cotton and chemical fiber, the market has a strong wait-and-see mood, and there is basically no substantial order. The upstream and downstream industry chain rework level is inconsistent, which makes the downstream enterprise operating rate affected, and it is difficult for enterprises to continue normal production.

2, stocks rose sharply. Due to the shortage of orders, many enterprises choose to produce regular varieties in order to ensure normal production and operation. However, the competition pressure of conventional varieties in the sales link is very large, resulting in the rapid increase of yarn and fabric stores in recent textile enterprises.

3, there is a shortage of liquidity. Due to the long duration of the epidemic, the slow recovery of orders after the resumption of work has resulted in backlog of inventory, and textile enterprises have no income and serious shortage of liquidity. Some enterprises are unable to guarantee the normal operation of production and operation.

4, the degree of implementation of supporting policies varies. According to the enterprises involved in the survey, the implementation of the preferential policies of the banks is not very satisfactory. Some have not even been implemented for the time being. The phenomenon of loans and loans has occurred frequently. The principal and interest rates are required to be returned on time. Textile enterprises neither have sales revenue nor have financing funds, or will aggravate some textile enterprises to resume work and stop work.