India Order Coming! Domestic Textile And Garment Industry Received Orders

"A large number of Indian textile orders have been transferred to China, with huge orders, which are said to have been scheduled until May next year." Such a news, so that the clothing industry cold because of the epidemic situation back to the "Spotlight" of the capital market.

Recently, we visited Jiangsu, Shandong, Guangdong and other textile and garment production bases, and found that the order situation of most enterprises has greatly improved compared with the first half of the year, and some enterprises' orders have increased sharply. In Suzhou Shengze, an important textile town, fabric enterprises received a one-time foreign trade order of 1 million meters last month, which is rare this year. In January of next year, the textile company of Gaohong will be located in Dongfang Jiami With the continuous improvement of domestic epidemic situation, the transfer of Indian textile orders to China, and the arrival of the traditional peak season and other factors, the prices of cotton and chemical fiber in the upstream continue to rise. China's garment industry, which has suffered from the "most difficult year", is ushering in a long-standing boom.

How long can this market last? Experts in the clothing industry said that under the background of repeated global epidemics, the transfer of short-term orders is a normal trade phenomenon, and the gradual recovery of domestic clothing consumption is also in line with expectations. However, the overall development of the domestic textile and garment industry is slowing down and becoming more and more difficult, and it will take one to two years to really recover its vitality.

Textile and garment industry reappears "queuing" market

China's Oriental silk market, located in Shengze Town, Suzhou, is regarded as "China's first cloth market" by the outside world. More than 7000 trading companies gather here, and the turnover has exceeded 100 billion yuan for many years.

As the vice president of China Oriental Silk Market Association, Zhou Jianchun is a well-known fabric operator in the industry, with customers covering most of the well-known garment manufacturers in China. We received an order of 100 thousand meters in the last month. In previous years, there were bigger orders. And this year, in the textile and clothing industry as a whole under pressure, such a large foreign trade order has been "rare.".

"Orders like 1 million meters are really rare during this year's epidemic." Ouyang Yong, director of Trade Promotion Department of Shengze Oriental textile city, said frankly that because the first half of this year was really too rough, the emergence of such a large order can really boost everyone's confidence.

"Due to the epidemic situation, some textile orders from India have indeed been transferred to China." Dongfang Shenghong chemical fiber plate foreign trade director Miao Yunlong said. Dongfang Shenghong is a well-known textile leader in the industry, and has been working overtime recently. "Business is really good recently." However, Miao Yunlong stressed that the recent booming orders of the company have little to do with the transfer of orders from India. "Due to the fact that Indian yarn is dominated by medium and low-end yarn in the whole international market, there are not many orders transferred to Shenghong. We mainly focus on medium and high-end yarn products."

"After May, exports have been recovering. In the third quarter, they began to keep pace with the same period last year. In some regions, exports were even higher than last year's growth level. In August and September, exports reached record highs." Miao Yunlong said frankly. In the half month since September 30, the average price of Dongfang Shenghong yarn has increased by 700 yuan / ton compared with the previous period, and some specifications have increased by 1000 yuan / ton. "The supply of many products is very tight now, coupled with the faster recovery of domestic market demand, there has been a queuing phenomenon in domestic and foreign trade recently."

Zhou Jianchun said that everyone in Shengze Town knows such a saying: business depends on the last four months of each year. These four months of business can be equal to the sum of the previous eight months, "now the traditional peak season has begun."

Located in Gaomi, Shandong Province, vosge shares mainly produce towels and bedding. In the past 20 years, the company's export volume of towel continued to rank first in the same industry in China. In the first half of this year, affected by the epidemic situation, the company achieved operating revenue of 2.024 billion yuan, a year-on-year decrease of 19.91%, and a net profit of 145 million yuan, a year-on-year decrease of 44.03%. And from the second half of the year, Vosges shares finally ushered in the market recovery. The company's relevant person in charge said, "our orders have improved since June. At present, the orders are full and have been scheduled to January next year."

Downstream demand releases and upstream raw material prices rise

After the cold winter in the first half of the year, the domestic clothing industry is ushering in the golden period of consumption.

"Now the epidemic situation is relatively stable, the economy is better, and clothing sales have improved significantly compared with the first half of the year. In addition, this year may be a cold winter, recently many customers hoard winter clothes in advance. " Shenzhen, a clothing industry.

According to the statistics of China's national business information center, from October 1 to 7, 2020, the retail sales of 100 key large-scale retail enterprises increased by 8.5% year-on-year, 14.3 percentage points higher than that of the same period in 2019, which fully shows the development momentum released by the construction of "double cycle" development pattern in China. Among them, clothing retail sales growth is quite eye-catching, with a year-on-year growth rate of 16.8%.

Taking Hongdou Group, a key enterprise in the field of clothing, as an example, from October 1 to 8, the online and offline sales of Hongdou clothing chain during the National Day holiday increased by 49.68% and 138.37% respectively. Among them, the total sales volume of Hongdou home offline stores exceeded 150 million yuan, an increase of 55% over the same period; the total sales of red bean men's clothing offline stores exceeded 100 million yuan. Bosden, a clothing company, is also selling well recently. Taobao data shows that from October 1 to 6, the sales of bosden flagship stores increased by 574% to 19.1 million yuan, the number of sales increased by 300% to 18000 units, and the average unit price of sales increased from 613 yuan in the same period of last year to 1034 yuan this year.

Corresponding to the recovery of clothing market, the prices of upstream cotton, polyester filament, polyester staple fiber, cotton yarn, viscose, spandex, nylon, etc. have increased to a certain extent. According to public information, cotton continued to rise in recent years, and cotton futures showed a supplementary rise after the National Day holiday, up more than 1400 yuan / ton compared with before the festival. The latest news of cotton price shows: so far, cotton futures price has broken through the key position of 14200 yuan, and set a new high point in 9 months this year.

With the gradual release of domestic demand, the fabric demand in autumn and winter is warming, and the production and sales situation is good, which further promotes the price rise of polyester. As of October 9, stocks of DTY, POY and FDY in polyester fiber factories decreased by 2 days, 1 day and 3 days respectively compared with the previous week; the prices of DTY, POY and FDY per ton were 6600 yuan, 5200 yuan and 5550 yuan, respectively, up 100 yuan to 120 yuan compared with the previous week. 3.3 yuan / week in the news of the mainstream Electronic Trading (RMB 4.0 / week). The strong demand for alkali free glass roving also led to the reduction of manufacturers' inventory. The price of alkali free yarn of mainstream enterprises in Jushi group, Taishan Group, Neijiang Huayuan and other industries were increased by 200 ~ 400 yuan / ton.

At present, Huafeng spandex (8.350, 0.05, 0.60%), Xinxiang Chemical fiber (3.380, 0.03, 0.90%) and Taihe new materials (16.230, - 0.09, - 0.55%) account for about 40% of the total market share. Gong Yuqian, an spandex analyst at Zhuo Chuang information, said that the recent rise in spandex manufacturers has been continuous. Relevant manufacturers raised prices twice in August, two or three times in September, and three times since October. Among them, on October 15, Huafeng spandex, Xinxiang Chemical fiber, Taihe new materials and other companies raised prices again, planning to

Specifications are generally increased by 2000 yuan / ton. The reason is that the price of spandex continues to rise. In addition, the supply of goods in the market is tight, and downstream customers follow up on demand. The overall market production and sales rhythm is good, and the atmosphere of bullish market is strong.

Some industry insiders who do not want to be named pointed out that the price fluctuation of cloth has increased significantly in recent two years. "In the past, it was relatively stable on the whole, and the price may rise by 20% - 30% in a month." The source pointed out that from the previous year, the price rise and fall cycle of cloth price suddenly became shorter, "the price rises by 30% this week, and may fall by 30% next week, which is not the real supply-demand pull." The above situation mainly occurred in low-cost fabrics, "even wake up and find that the price of cloth has increased by 50% or 60% In his view, in recent years, the market speculation in low-priced cloth, "the price of high-priced cloth has been relatively stable."

Transfer of orders from India is not the main reason for the rise

"A large number of Indian textile orders have been transferred to China, with huge orders, which are said to have been scheduled until May next year." This hot news on the Internet, so that the clothing industry due to the cold epidemic situation re aroused outside attention.

In recent months, due to the large-scale textile production orders in India, many large-scale enterprises cannot guarantee the normal production of bedding sheets in India.

India is currently the world's largest cotton producer, the world's largest jute producer, and the world's second largest silk producer, with its yarn production capacity accounting for 22% of the world. The textile industry accounts for about 15% of India's total export revenue, and is also one of the largest sources of foreign exchange income of India's textile industry. China is the largest textile producer and exporter in the world, and has obvious export advantages of labor-intensive products. The epidemic has caused a serious impact on both the supply side and the demand side, and the supply chain of the industrial chain has been hindered simultaneously. China has also experienced the same test. It is a normal market behavior for multinational companies to adjust their order production globally and for international purchasers to select suppliers according to their production capacity. China also has some industries and local orders transferred to other countries and markets for production.

Li Zhe (not his real name), a well-known textile and garment analyst in China, confirmed the statement that some orders were transferred to China due to the current epidemic situation in India and Southeast Asia. According to his understanding, the capacity utilization rate of some domestic enterprises reached about 80% in July and August, and the output was full in September. "Short term factors, as well as the long National Day holiday this year, led to terminal demand pulling; in addition, the traditional inventory replenishment peak season before winter also had a certain impact."

According to the data from the General Administration of customs, in the first three quarters of this year, China's textile and clothing exports amounted to US $215.78 billion, a year-on-year increase of 9.4%, and an increase of 6.2 percentage points over the first half of this year.

The General Administration of Customs said that since the second half of the year, the situation of clothing export has continued to improve. In September, the clothing export volume was US $15.23 billion, an increase of 6.5% over the same period of last year, maintaining a positive growth trend for two consecutive months. At present, the stable industrial chain supply chain of China's textile industry is also attracting some overseas orders to return.

According to the person in charge of Vosges, this year, the United States lowered the tariff on Chinese textile products exported to the United States, which also stimulated the foreign trade market. "At present, the biggest impact on the industry is tariff increase in Sino US trade friction. Before February this year, the United States had lowered the tariff on some textile products, such as bedding goods, from 15% to 7.5%. However, due to the impact of the epidemic situation, the attention of the outside world is not high, and the tariff reduction is good for the return of this order. "

However, according to the statement of order transfer in India, the relevant person in charge of a domestic textile fabric listed company directly said that "no feeling", "most of the company's products are exported, and Europe and America account for a relatively high proportion. But the European and American epidemic situation has not reached the peak, the order is still insufficient. " The person in charge believes that with the launch of the new crown vaccine and the recovery of downstream business, the whole industry will also usher in a recovery, "at present, next year will certainly be better than this year."

"Because of the impact of this year's epidemic, we are too cautious. We have no goods in hand, no goods in trade and no goods in clothing." Zhou Jianchun analyzed that the news of "the coldest winter in 60 years" has promoted the price rise tide, "we have the psychology of buying up and not buying down, and the demand has burst out in this way."

The recovery will last at least two quarters, and the short-term recovery will not change the long-term predicament

Deng Xianhe, an analyst in the chemical industry of Societe Generale Securities, believes that the current prosperity of China's chemical industry is still at the bottom. Most of the product prices are far below the historical average price, and some even fall into the last 10% of the historical price range. The industry's profit has dropped significantly. Some product prices have entered the stage of general loss in the whole industry, and the space for further downward is very limited, and the overall product price The probability of up lattice is higher than that of down lattice.

How long can the recovery of the industry last? In the view of analyst Li Zhe, the recovery will last at least two quarters. "Orders are generally one quarter ahead of schedule. At present, the fourth quarter orders are basically completed. The epidemic situation in India is booming and will last at least until the end of the year, so orders for the first quarter of next year will not be a problem." However, he also believes that domestic textile and garment enterprises are mainly export-oriented, and relatively small domestic demand is difficult to drive the whole industry, "the recovery of demand side needs to see the progress of the epidemic situation. Most of the clothing stores in Europe and the United States sell offline. At present, offline stores in some regions are not open and the demand is not coming. Therefore, the industry recovery is a short-term behavior and there is no long-term logic. "

He said that after the end of the epidemic, the relevant orders will probably return to India and Southeast Asia. Textile and garment enterprises in India and Southeast Asia have advantages in labor cost, energy cost, land cost, government tax, tariff and environmental protection. "In terms of Southeast Asia, the gross profit margin of local textile and garment enterprises is 5% higher than that of domestic enterprises."

For this wave of domestic demand, foreign trade driven by the domestic clothing industry boom, industry insiders generally believe that the domestic clothing industry as a whole is still in a historical dilemma. According to the analysis of industry insiders, the recent recovery of the industry also has the situation of "order enlargement". For example, if you want to purchase 1 million meters of cloth, you may ask 8 production enterprises, and the 8 enterprises will also ask the upstream, and the 1 million meters may be transferred to 10 million meters, in fact, the order is 1 million meters. "

Cheng Weixiong, an expert in textile and garment brand management and general manager of Shanghai Liangqi Brand Management Co., Ltd., said that the epidemic has impacted on the domestic and even global supply chain market, and the global market has not yet fully recovered and improved. It is too early for the domestic garment industry to talk about the outbreak. "The whole industry is still in a state of slowing down and getting stuck, and it needs a recovery cycle. Of course, the transfer of some orders is not ruled out, which is normal trade behavior, but "a certain point can not boost the whole area."

Cheng Weixiong believes that the clothing industry's development retreat this year needs two or three years to recover, "don't expect too much rebound in the fourth quarter, even if the rebound can not make up for this year's loss." He also revealed that since this year, in the face of the impact of the epidemic on the clothing industry, most of the domestic small and medium-sized garment factories have turned to domestic trade, e-commerce or live broadcasting. The sharp reduction in foreign trade orders of large factories is not a case in point, and they are also exploring domestic trade and self-made brands.

From October 15 to 16, the 2020 China fashion conference was held in Haining, Zhejiang Province. However, in the process of the transformation from digital garment industry and smart industry to a new one, Sun said that in the process of transformation from digital garment industry and smart garment industry to a new one, sun Rui will accelerate the transformation from the top to the bottom of China's garment industry A realistic path of integrated development. In addition, the proportion of export cross-border e-commerce transactions in China's export scale is expanding, becoming a new growth point of "stabilizing foreign trade". China's local fashion e-commerce ushers in an excellent opportunity to go out to sea. Enterprises need to deepen brand building and gradually change from "flow oriented" and "product oriented" to "brand oriented".

The relevant person in charge of China Garment Association also said, "at present, China's clothing industry has entered a new development stage of strategic reconstruction and innovation and reform, and has stood at a new starting point to participate in leading the global clothing industry reform." Zhang Yueming, chairman of Haining China Leather City Co., Ltd., said that in the future, the development of clothing industry will present three major trends: younger and more personalized consumers; more and more obvious advantages of brand clothing; and deep integration of online and offline.