With joy, we bid farewell to 2020 and welcome the new 2021!
The past 2020 has been a year of adversity and opportunity In the first half of the year, under the shadow of the epidemic, the textile industry ushered in an unprecedented cold winter. In the second half of the year, the textile industry, which took the lead in controlling the epidemic, ushered in a roundabout overtaking. As demand picks up, some overseas orders have been transferred to China, and news of price increases, liquidations, and stockouts are endless. In such an extraordinary year, what have textile people experienced?
01 The epidemic spread abroad: production and orders suffered a double blow
At the beginning of the year, the epidemic at home and abroad The spread of the epidemic has dealt a heavy blow to the textile people.
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A person in charge of a weaving manufacturer revealed: “We suffered two blows from the epidemic. The first time was due to the suspension of production. , despite frequent reminders from customers, the company’s resumption of work was not smooth, with orders but no workers; the second time came from the demand side. After most employees arrived, the situation reversed. The epidemic spread overseas, and foreign customers began to cancel or cancel orders. Postpone orders. “
“Order shortage” has become the biggest challenge for textile companies in the first half of the year. The foreign trade orders of textile companies hit hard by the epidemic dropped by more than 70% on average, and until April No new orders were obtained at the end of the month.
No orders means no income, but labor costs, water and electricity rent and other expenses are difficult to offload, which brings The biggest problem is the conflict between inventory and funds. “We used to work two shifts, but in April it became three shifts. We also implemented a rotation system and kept the operating rate at about 70%. This was mainly to cope with the sharp decrease in production orders and try our best to Possible cost reductions. ” said the person in charge of a weaving factory with more than 100 looms.
Under the epidemic, traders, weaving factories, and dyeing factories have been overwhelmed by a large number of orders. canceled, the inventory backlog is serious, and the speed of customer payment has also been lengthened. Many textile bosses have come up with the idea of reducing production and taking holidays. This has also caused the loom operating rate in Jiangsu and Zhejiang to be at the lowest level in recent years in April and May, while the inventory of gray fabrics has been at a low level in recent years. It has reached a high level in recent years.
02 Foreign Trade Transfer Domestic sales, switching to production of anti-epidemic supplies…Enterprises start the road to self-rescue
Under the crisis, a large number of textile enterprises focusing on foreign trade have transferred their business to the domestic market. During the visit, many cloth bosses revealed that foreign trade has almost stagnated this year, and due to the ups and downs of Sino-US trade relations in recent years, they have been exhausted, so they began to expand into the domestic market.
When the epidemic was at its most severe, the demand for foreign anti-epidemic supplies continued to grow, and the demand for non-woven fabrics, melt-blown fabrics, etc. also increased sharply, resulting in an imbalance between supply and demand in the market, and prices also showed a rising trend.
It is understood that the price increase of non-woven fabrics was the most serious when it rose from 18,000 to 160,000 or even 240,000 per ton, and many buyers traded in cash. Even so, it is difficult to order spot goods. During that time, the price of anti-epidemic supplies doubled, and the high profits became a hot commodity. Therefore, many textile bosses focused on anti-epidemic supplies and wanted to take the opportunity to make quick money. To make up for the losses in the first half of the year, many bosses who entered the market early have indeed made money, but more bosses have become takers.
03 Foreign epidemic situation is serious, orders return to China
In the second half of the year, September In October, news that a large number of orders were transferred to China due to the severe epidemic in India attracted the attention of textile people. Domestic factories received transfer orders from India. It is understood that a home textile factory in Jinhua, Zhejiang received an order from the international brand ZARA – hundreds of thousands of tablecloths. “These tablecloths were previously produced in India. I didn’t expect ZARA to come. I have never seen so many orders.” “The person in charge of the home textile factory said.
At the same time, benefiting from the impact of Double Eleven and the expected cold winter, factory orders increased sharply. For a time, raw materials, gray fabrics, and dyeing fees increased, and the industrial chain was booming. In particular, cold-proof clothing fabrics, such as nylon, imitation memory, pongee, T800, T400, and gallbladder, are in good demand, with large orders of hundreds of thousands or millions of meters appearing frequently, and the inventory of weaving factories In response.
Enter the second halfSince the beginning of 2018, China’s manufacturing has turned around, and domestic and foreign demand has rebounded with retaliation. China has quickly resumed work and production after controlling the epidemic. However, epidemics in India, Southeast Asia and other countries have continued to recur, and factories have been forced to suspend production and production has experienced disruptions. The international market has Reliance on manufacturing in China has increased. Global manufacturing has a tendency to return to China.
04RCEP is signed, vaccines are progressing rapidly, and the textile industry is ushering in great benefits
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On the evening of November 9, Pfizer and BioNTech announced that their jointly developed COVID-19 vaccine candidate has made significant progress in the interim analysis of the Phase 3 clinical trial study.
November 15, regional comprehensive The Economic Partnership Agreement (RCEP) was officially signed on the 15th during the East Asia Cooperation Leaders’ Series Meeting, and the free trade area with the largest population, the most diverse membership structure, and the greatest development potential in the world was born.
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The signing of RCEP and the rapid progress of foreign vaccines are undoubtedly two pieces of good news for the textile industry. First, the signing of RCEP means that the tariffs that have troubled textile people for a long time will gradually decrease. This will bring great convenience to textile and apparel companies in these 16 countries in terms of suppliers, logistics and customs clearance. Once the COVID-19 vaccine is officially vaccinated, the epidemic will no longer be the biggest problem next year. Missing orders are expected to return, and there is hope for the textile and apparel market next year!
The above events are only a small part of what happened in 2020. There are many other events that have a great impact on the textile industry, such as Sino-US relations after Biden came to power The trend is the depreciation of the US dollar, sea freight exceeding US$10,000, a serious shortage of containers, and the China-EU investment agreement that has just been successfully negotiated. But in any case, 2020 is already in the past, and now we need to look forward more to 2021. At present, the recurrence of foreign epidemics and the mutation of viruses are still the biggest black swans hindering the recovery of the foreign trade market. After experiencing the impact of the epidemic It will take some time for the foreign textile and apparel market to recover. It is foreseeable that my country’s textile industry will develop steadily upward in 2021, but textile people still need to remain cautious, there are many uncertainties, and do a good job in corresponding risk control.
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