Market Vitality: Terminal Enterprises Receive Orders, Textile Mills Stock Up Constantly!

According to the feedback of cotton textile enterprises in Shandong, Jiangsu, Anhui and other places, the inquiry and shipment of high count pure cotton yarn and polyester cotton yarn have been smooth in the past week, and the ring spinning and OE yarn of c40s and below have recovered periodically (the demand for 40s yarn continues to be good) driven by the "golden nine silver ten" of the terminal consumer market, and most of the yarn mills have accelerated the de stocking.

From the perspective of the chemical fiber and polyester market, the number of orders on the market has indeed increased since September. According to the situation learned from the market in the past two weeks, the order receiving situation of textile enterprises in September was significantly better than that in August. General manager Yang, a major chemical fiber and rayon fabric enterprise, said that after entering September, the number of foreign trade orders has increased significantly. The orders are mainly used to make some fabrics for coats and down coats in autumn and winter, including elastic products such as T400 and cool silk cotton.

After September, weaving enterprises can see that the rate of starting up the machine has gradually decreased compared with that of weaving enterprises.

Although the downstream textile, clothing, foreign trade and other enterprises mainly pay for goods in 1-3 months, the whole textile industry chain starts, operates and slowly accelerates. With the comprehensive control of the domestic epidemic situation, production, living, economic activities and income gradually return to normal, buyers and retailers begin to place orders in spring and summer of 2021. The confidence of cotton mills, cloth factories and textile and clothing enterprises has been rising with the orders received and goods prepared by terminal enterprises.

However, according to the survey, textile enterprises have some concerns about whether the terminal consumption can be "powerful" after October. The production capacity of spinning and weaving is reserved. The equipment load is generally maintained at 75-85%, and "quick order, fast processing and quick delivery" are realized as much as possible. The "de stocking of finished products and acceleration of capital flow" are still the main direction.

Xinjiang cotton ban warning sounded

According to reports, U.S. House members overwhelmingly passed a bill on Tuesday that would effectively ban the import of American products from China's Xinjiang Uygur Autonomous Region because of the alleged use of government backed forced labor in Xinjiang. Different from previous statements by trump and the White House, the prohibited products include all or part of Xinjiang's products, not just cotton and tomato products. According to the analysis of some export-oriented textile and clothing enterprises and trading companies, if the bill finally comes into effect, most of China's cotton products exported to the United States will be banned.

Once the U.S. bill prohibiting the import of products from China's Xinjiang Uygur Autonomous Region is passed and implemented, it will cause great damage and pressure on the consolidation and development of Xinjiang's cotton industry, cotton textile, clothing and so on. First, according to the calculation of some institutions and investment banks, China's annual cotton consumption of textiles, clothing, etc. exported to the United States is about 700000-800000 tons, of which 70% are more than On the surface, Xinjiang cotton is used, which has a direct impact on the consumption of about 500000-600000 tons of Xinjiang cotton; on the other hand, in addition to all cotton products, there are also polyester cotton, cotton viscose, cotton ammonia and other series of products for the export of American textile and clothing. If the implementation of Xinjiang cotton products act is prohibited, the impact on domestic cotton textile, clothing and foreign trade companies will be "divergent" and large-scale, and China's textile and clothing products can only passively compete with the United States Market decoupling.

Meager profits are eaten up by the exchange rate

After the outbreak of the new crown disease in the United States, the Federal Reserve released water without discipline and finally flooded. With the opening of the printing press in the United States, the dollar index has entered a downward trend since late March, and there is no sign of turning around so far. Since the end of May, the RMB has continued to appreciate. The exchange rate of US dollar against RMB has continued to appreciate from 7.17 at the end of May to the current level of 6.8. The RMB exchange rate has appreciated by nearly 5% since its low point at the end of May! If the profits of export enterprises are less than 5%, they may be working for nothing, or even paying for them. Especially for labor-intensive enterprises with low profits, orders have been sharply reduced due to the outbreak of the epidemic, and then the meager profits will be eaten by the exchange rate. The continuous sharp appreciation of RMB against the US dollar is conducive to the import of cotton and cotton yarn, but also significantly weakens the export competitiveness of China's textiles and clothing.

The capital chain is tight, some small and medium-sized manufacturers have the risk of capital fracture at any time

From the current market inventory, in September, the inventory of some manufacturers has decreased, but the inventory of the whole industry is still at a high level, and the recovery of foreign trade demand is not as expected. There is a possibility of a second outbreak of the epidemic. Many clothing and home textile brands are reducing stores, adjusting production plans, and are more cautious about fabric procurement. Therefore, whether the next inventory can be converted into funds, or there is a great doubt.

In addition to the short-term inventory is difficult to cash, there is also a general reflection this year that the accounting period has become longer, and there is a default. A trader disclosed: "the accounting period is now 3-6 months, the situation of default payment is not uncommon. At present, 30% of the receivables have not been received. Although the customers do not intend to default, if the customers are in such arrears, it will make our assets Gold flow is in trouble. It is very likely that it will face shutdown and bankruptcy. " This year, due to the epidemic situation, the whole industrial chain has been prosperous and damaged. No matter textile factories, traders and clothing companies are short of money, which also leads to a longer payment period this year than in previous years. It is understood that downstream weaving factories, clothing factories and traders generally implement 1-3 month account period for payment collection, while raw material procurement is cash and spot. Therefore, the overall cash flow of enterprises is tight, and some small and medium-sized manufacturers have the risk of capital fracture at any time.

Orders are hard to hold up until December

In recent years, orders began to increase, and weaving start-up rate gradually increased, but the follow-up of downstream orders was insufficient, and the overall order quantity was lower than in previous years. September improved with the improvement of domestic market, but also due to seasonal fabric orders in autumn and winter. However, the continuous epidemic situation overseas has a great impact on the clothing demand, and the order quantity is limited, so it only lasts for half a month. According to enterprise feedback, foreign trade orders in the second half of the year are usually between the end of September and before Christmas. Obviously, the number of foreign trade orders has been reduced, which has affected the demand of foreign trade enterprises. In addition, domestic demand orders generally fell by more than 20% compared with the same period in the previous two years, and from the perspective of delivery time, orders are difficult to support until December.

The epidemic situation is like a mirror. He exposed some problems rooted in enterprises. At present, many small and micro textile enterprises say that their life is not going well. Especially this year, many large enterprises can reduce costs and occupy the market in large quantities by virtue of their fine management. The market space of some small enterprises will be squeezed and the survival of the fittest will be accelerated.