Market Observation: Forecast The Market Performance Trend Of Textile And Clothing Manufacturing In 2023

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Recently, the State Council released the "new ten" measures to further optimize the epidemic prevention and control measures. The apparel retail sector is expected to benefit from recovery. With the increase of fitness demand and the orderly recovery of sports events, it is expected that the growth rate of the sports apparel sector is expected to return to the CAGR of 10% before the epidemic;

The inflation data of the United States in October outperformed expectations, and the Hong Kong stock clothing sector is expected to usher in valuation repair under the adjustment of interest rate hike expectations. Reviewing the Japanese and American sportswear industry, the demand of the industry recovered significantly in the first quarter after the easing of the epidemic prevention and control policy, and the growth rate in subsequent quarters continued to be 10-25 PCT higher than the normal growth rate before the epidemic.

Since 22Q2, the domestic epidemic has affected the prosperity of domestic sales. High overseas inflation, the Federal Reserve's interest rate hike, and Nike, Adidas and other global sports brands have adjusted their orders due to inventory, affecting overseas demand. In terms of domestic sales, the social retail sales of domestic textiles and clothing in Q3 recovered from Q2. The growth rates from July to October were+0.8%, 5.1%, - 0.5% and - 7.5%, respectively. After October, epidemic outbreaks in many places affected sales; In terms of export, from October to November 2022, the export value of yarn and products will be - 9.1% and - 14.9% year on year respectively, the export value of clothing and accessories will be - 16.9% and - 14.9% year on year respectively, and the export value of shoes and shoes will be+3.1% and+3.7% year on year respectively. The export of clothing products is expected to decline.

The decline in demand has led to the pressure on sales and profits of the apparel manufacturing industry. Since March 2022, the domestic clothing manufacturing industry has experienced the epidemic situation in East China, the ban on cotton in Xinjiang in the United States, and the de stocking of overseas brand clothing, and the domestic and foreign demand has declined; At the same time, the prices of cotton, chemical fiber and wool, the upstream raw materials, have declined rapidly due to weak demand and high prices, which has led to product price cuts and intensified competition in the industry, further intensifying the profitability of upstream yarn suppliers in particular. Middle and upstream apparel enterprises are facing the dual pressure of sales and profitability, and the industry's operating rate continues to decline.

With the optimization of epidemic prevention and control measures, the domestic clothing terminal consumption demand will gradually repair, which is expected to drive the confidence and prosperity of the upstream manufacturing industry to recover. On the one hand, since November 2022, with the optimization of epidemic prevention and control measures, the confidence of the domestic garment manufacturing industry is expected to reach the bottom. According to the prosperity monitoring results of the China Textile Federation Circulation Branch, the prosperity index of national textile and garment professional market managers in November 2022 is 47.80, 0.86 percentage points lower than the 48.66 in October, and 1.08 percentage points lower than that in October.

Futures prices of cotton textile industry bottomed out. Since November, the price of Zheng Mian's main futures has bottomed out and recovered, rising from 13000 yuan/ton to 13800 yuan/ton, up 6% in the past month, while the price of cotton yarn futures has risen from 19200 yuan/ton to 21000 yuan/ton, up 9% in the past month; International cotton price Cotbook: The A index rose from 89.2 cents/pound to 98.9 cents/pound, up 11% in the past month. Although the domestic spot cotton price has slightly declined, the overall trend is stable. It is expected that with the confidence and prosperity of the textile and clothing industry recovering, consumer demand will be transmitted to the middle and upper reaches, and the demand for yarn replenishment will increase. Among them, the pressure on sales and high price inventory faced by printing and dyeing enterprises since the middle of the year will be gradually released, and the double repair of quantity, price and profit will be realized.

Since August 2022, the price of nylon has stabilized, and nylon 66 has declined. It is optimistic that the release of diversified downstream demand will drive the price of nylon back up. Since the beginning of the year, the prices of PA6 chips and filaments have declined by - 18% and - 12% on a month on month basis, mainly because the domestic epidemic has affected the demand for high-end clothing and industrial use; The price of PA66 has declined by 30% month on month since the beginning of the year, mainly due to weak demand and the production of Tianchen Qixiang Adiponitrile, the localization process of PA66 has accelerated. It is expected that with the optimization of epidemic control, the demand for high performance clothing such as outdoor jackets and down jackets in the downstream application field of PA66 is expected to rise, and the price of PA66 is expected to recover.

Since October, the price of Australian wool has stabilized and rebounded by 60 cents/kg, optimistic about the relative prosperity of domestic and international demand for warmth and outdoor. Since October, the price of Australian wool has stabilized and recovered, rising from 794 cents/kg to 857 cents/kg, up 8%. It is expected that with the relative prosperity of domestic and international demand for conventional wool products such as warmth preservation and outdoor products in winter, the bottom of wool prices will pick up, and we are optimistic about the gradual recovery of subsequent domestic demand.