There used to be a saying in the stock market that as long as they don’t buy stocks, the return rate can exceed 80% of stockholders. This year’s textile market seems to have encountered a similar dilemma.
Wang is always the person in charge of a weaving company. According to him, after November, there were no more orders in the market. Although the market in October was good, such “good days” only lasted one month. . The inventory in the warehouse has been removed by half, but now the orders received are almost finished one by one, but no new orders have been received.
As the epidemic situation in Europe and the United States is getting worse, Europe has begun to lock down the cities for the second time. The stock market in the spring and summer next year will be directly disrupted. Large supermarkets such as Wal-Mart and COSTCO, which occupy the mainstream of the European and American markets, cancel a large number of clothing orders. Was “cut in the middle”. Seeing the inventory in the warehouse accumulate again, the textile people felt very melancholy.
But will the company that receives the order be happy?
Li is always the manager of the foreign trade department of a textile company. According to him, although he has recently received some foreign trade orders and rushed to the construction site to make the order, he actually lost money in the last calculation.
This is mainly due to four reasons:
First of all, everyone now has a lot of inventory on hand, and all of them are short of orders. It belongs to the seller’s market. Foreign traders will lower their prices when they learn about this situation;
Second, because the customers who placed large orders in previous years were afraid to stock up due to the epidemic. In the end, those who bought clothing fabrics were all quick and urgent small orders. Anyone who has done textiles should know that the smaller the order, the more demand. Urgency often means higher costs;
Third, because of the signing of RCEP and the stability and improvement of China’s domestic economy, the RMB exchange rate has appreciated sharply, but this is not a good thing for textile foreign trade companies in the short term. After the exchange rate has returned to the 6.5 era, the pressure on textile companies has increased;
Finally, since the economies of Europe, the United States and other countries have not yet recovered, and China’s economy is performing well at present, exports are far greater than imports. Only one 3.5 containers can be returned. Finally, domestic containers are increasingly scarce, but foreign ports are piled up. After all, shipping costs will increase greatly. For example, the Southeast Asia route, from around 10 yuan/kg in early September, has now risen to 18-20 yuan/kg.
Companies that cannot receive orders are worried about not being able to absorb their inventory, and companies that have received orders are worried about losses caused by increased costs. However, compared to the situation in which even normal operations in foreign countries are affected, It’s even pretty good that domestic companies can start work normally.
Due to the incomplete development of the industrial chain and the ineffective control of the new crown epidemic, emerging textile clusters in Southeast Asia and other emerging textile clusters have been greatly restricted in completing orders in 2021, and have been “destructively” hit.
According to a report by Vietnam’s “Industry and Trade Electronic News” on November 2, Vietnam’s textile and apparel exports in the first 10 months are expected to be US$24.76 billion, a year-on-year decrease of 9.3%. The annual export is expected to be USD 33-35 billion, a year-on-year decrease of 10%.
Petra News Agency recently reported that the Jordan Industry Association stated that the export value of Jordanian clothing and leather in the first nine months of this year was approximately 899 million yuan (approximately US$1.27 billion), down 15% year-on-year. It is expected that industry exports will deteriorate in the fourth quarter of this year, and the decline may reach 25%.
The Myanmar Global Star News reported that according to statistics from the Myanmar Ministry of Commerce, the garment industry’s exports in the 2021/20 fiscal year reached 4.28 billion U.S. dollars, a decline of 6.95% from the 4.6 billion U.S. dollars in the same period last year
Textile companies in China and even the world have been in a situation of overcapacity many years ago, especially for some conventional varieties with relatively simple processes. This problem is even more serious.
Of course, this is a problem that most traditional industries will face in the course of their development. Profits are high, and everyone invests in droves. In the end, supply exceeds demand.
However, the expanded production capacity is difficult to reduce. It is an objective necessity. The human will is transfer.
However, under normal circumstances, the worst of the market is just like this in 2021. The market will make adjustments on its own and then form a 3-4 year business cycle. However, this year’s epidemic brought a “dimensionality reduction blow” to this normal cyclical change. It was said that the good market was loosened like a spring for two years and then tightened for two years. Suddenly the epidemic was like a bear child outside. Keep dragging it down. When will it be able to bounce back, it depends on when the impact caused by this bear kid will be eliminated.
However, with the recent positive news of the new crown vaccine, the dawn of victory over the new crown is about to emerge.
Zhang Wenhong, director of the Department of Infectious Diseases of Huashan Hospital affiliated to Fudan University, stated in a forum held on November 28 that at the end of this year and early next year, people all over the world will usher in a climax of vaccine launches from all over the world, and the epidemic will be slowly controlled. live.
I believe that at that time, the market will be able to pick up, and the “retaliatory rebound” that textile people are looking forward to may come.