With The Closing Of Ports In Many Countries, Textile Orders Have Been Broken, And The Financial Chain Of Textile Enterprises Has Become A Difficulty

Recently, the statistics of China's textile industry are not optimistic. Among them, the fabric output in the first half of the year was not expected to decline, with a decrease rate of 25.9%; the per capita clothing consumption expenditure was 611 yuan, down 16.4%, accounting for 6.3% of the per capita consumption expenditure; the capacity utilization rate of the textile industry was 70.3%, down 7.9%; the fixed assets investment of the textile industry decreased by 22.4%

The bleak state of the textile industry has begun to emerge since the outbreak of new crown pneumonia in overseas countries. The lack of overseas markets in the first half of the year has intensified the competition in the "cake Limited" domestic market, and various textile data are also extremely poor. But the pessimistic situation is far more than the surface of the data, or not just the first half of the year, the recent market risks still exist!

Port congestion caused by suspension and epidemic rebound

With the unsealing of European and North American societies and the increasing activity, ports in these regions are facing more and more traffic jams.

According to the International Port Association According to the latest covid-19 port barometer report released by nal Association of ports and harbours, the world's major container ports have to face more containers than ever before due to the impact of the tide of suspension.

This sudden pick-up in vessel activity over the past few months has resulted in a surge in demand for vessels in the port.

It is reported that major container ports in Europe and North America have reported a significant increase in the average volume of ultra large container ships (ULCS) per call, with some hubs carrying up to 10000 TEU.

This makes the terminal and yard operations reach a peak, and begin to affect land operations, especially trucks entering and leaving the port. The port also said it would take a few days for the dock to return to normal cargo volume and to recover.

The downturn in economic activity triggered by the new crown epidemic has exacerbated the global market turmoil and led to the contraction of Global trade. International Monetary Fund (IMF) nal Mo In June, international trade flows fell by about 3.5% year-on-year in the first quarter due to weak demand, the collapse of the tourism industry and supply disruptions related to the closure.

In a report entitled "global freight volume after covid-19: what's the next step?" McKinsey pointed out that the new outbreak is likely to impact the global logistics and trade industry for a longer time than any other recent crisis.

According to the report, by the second and third quarters of 2020, global unrestricted trade demand may decline by as much as 13% to 22%. In contrast, the worst quarterly decline in trade volume during the global financial crisis of 2008 was about 5%.

Citing various scenarios, McKinsey said it would take 15 to 48 months for the volume to return to its level in the fourth quarter of 2019, and the value of the loss would be equivalent to 8% to 49% of the total trade volume in 2019.

"Lack of confidence in the market is still exist!

According to the practice of textile circle, customers will predict the order quantity in the next period. After all, it will take at least three or four days from the time of placing an order to shipping. If customers want their customers to get the goods early, they usually go to the manufacturer to place an order in advance.

According to related reports, as shoppers are still worried about the possibility of infection with the new coronavirus, retailers have to postpone purchasing and plan to sell the remaining basic clothing in spring in autumn. Many famous brands, such as Nike, PVH, Ralph Lauren, all said that they would cancel some autumn orders. In fact, this phenomenon still shows that people have insufficient confidence in the textile market in the second half of the year, which directly leads to the cancellation of orders!

Due to the special situation of the epidemic situation, the number of orders decreased by more than half compared with the previous years, and the large orders of several hundred thousand meters and several million meters are very rare. Therefore, the greater the risk of textile industry this year!

"We have a customer who ordered 500000 meters of composite silk with four sides of elastic sheet. We thought we had received a large order, but when the fabric was finished, the customer only took 100000 meters. The key is that the customer paid half of the 100000 meters. If the customers don't want to sell the remaining 400000 meters, we can only use them as stock. We don't want to throw out the gray cloth at a low price "Too bad!" a textile boss in Shengze said helplessly.

The abnormal congestion of ports and the "break of appointment" of orders from time to time are not only the intuitive feedback of the poor current and past textile market, but also a serious blow to the market confidence in the future textile market. The whole textile industry is more difficult to face the future changeable market.

In the future, the inventory is still fierce, and the competition is difficult

"The cold market situation in the first half of the year has not yet been able to digest all kinds of overstocked inventory and cancelled orders, and the cruel market competition in the second half of the year has begun", which almost all textile workers need to face.

In the investigation of the impact of the new epidemic situation on the members, affiliated enterprises and associations of the International Textile Federation, we can see that 20% of the textile enterprises think that it will not be able to recover to the level before the crisis by the fourth quarter of 2020, while 23% and 21% believe that the recovery can only be achieved in the first and second quarters of 2021, respectively.

Even with the most optimistic estimation and the time of stock preparation in advance, such a weak market will last at least three months. Before the market improves, the extent to which the inventory will increase and whether the capital chain can be maintained has become a huge challenge to textile enterprises.