As the epidemic continues to spread, production and work have been suspended across the country, and the resumption of work has not been guaranteed. Bad news has also come out of the foreign trade market:
Foreign trade
India has experienced a sharp increase Increase import tariffs and introduce policies to restrict imports!
Nirmala Sitharaman, Finance Minister of the Government of India, announced in his 2020-21 government budget that the tax rates for furniture, footwear, home appliances, mobile phone spare parts, toys and other products will be increased. Import tariffs, and further amend the Anti-dumping and related measures of the Tariff Law (Section 28DA) to restrict imports! Among them, footwear increased from 25% to 35%.
In addition, India’s 2020 government budget has added a new chapter to the tariff law, which will set stricter standards for FTA origin inspections. The Indian government has further revised the anti-dumping and defensive measures provisions in the Tariff Act (Section 28DA) to restrict imports. Currently, India ranks second in the world in terms of the number of anti-dumping investigations against China after the United States.
Vietnam explicitly rejects all ships from “epidemic areas”? The 14-day quarantine may no longer work!
According to industry insiders: Now Vietnam CAM PHA no longer has to wait 14 days, but is not allowed to enter at all. Previously, Vietnam had been quite harsh on ships from China or from epidemic areas. To meet the quarantine requirements, the ship must anchor in a specific place and be quarantined for 14 days before docking.
Indonesia, Jordan, and Russia have also suspended the import of some Chinese products!
The editor previously saw on the Internet the cry of a boss of a factory in Dongguan:
There are about 150 employees in the factory. In a normal month, the rigid expenditure for a month is 1.5 million yuan, including factory rent, employee wages, five insurances and one housing fund, depreciation of machinery and equipment, industrial water and electricity bills, and taxes.
Because the products produced in the manufacturing industry have thin profits, the gross profit margin is only 4 points and the net profit margin is 1 point.
It was already the season to start work after the Spring Festival every year, but due to the seriousness of the epidemic, it was impossible to gather personnel to resume work, so it could only be delayed again and again. Every day he felt on pins and needles…
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For textile bosses, this is indeed the case! On the one hand, it is the pressure from foreign trade, and on the other hand, it is the pressure from its own operations. I recently communicated with several textile bosses, and their impression to the editor is: after the Lantern Festival, the epidemic is under control and the factory starts working as scheduled. Then the factory rent, employee salaries, and machine depreciation during this period are all within the budget and can be afforded. But if the epidemic has not improved by the end of February, then for textile bosses, money will be wasted every day…
However, with the recent news that the Jiangsu and Zhejiang textile industry cluster Shengze (postponed to February After 24:00 on the 20th) and Keqiao (postponed to after February 17), Guangzhou Zhongda, the largest textile fabric gray cloth trading market in the country, also issued a notice on the 5th to “delay the opening of operations indefinitely” , it can be seen that the current novel coronavirus epidemic is still severe, and the market is expected to be in a shutdown cycle in the short term.
Faced with this “longest holiday in history”, in addition to worrying about whether the orders that have been received will miss the delivery date, textile bosses They secretly began to calculate the accounts in their hearts:
After the start of construction on 01, the raw materials are likely to drop, and the raw materials previously stored will become high-priced inventory!
The market situation in 2019 that has just passed has caused many textile bosses to feel unparalleled pain. Therefore, most textile bosses will choose to purchase raw materials on demand. But with the coming of the Spring Festival in the Year of the Rat, or because of traditional habits, or because the payment for goods is withdrawn, or because the raw material salesperson predicts that the price will increase after the new year, weaving companies have more or less inventory of raw materials. According to data from sample companies monitored by China Silk Capital Network, most weaving manufacturers have 7-15 days more raw material inventory than usual, which is around 20-30 days.
With the advent of this epidemic, everyone’s rhythm has been disrupted. At present, weaving manufacturers are facing delays in starting operations, while polyester factories are still producing. There is only supply but no demand. This will inevitably cause polyester factories to choose to trade price for quantity due to high inventory. Once the price of raw materials drops, the inventory originally stored in weaving factories will also be lost. face the risk of depreciation.
02 It will take time for terminal demand to recover, and high inventory restricts the price of gray fabrics!
According to previous practice, clothing, catering, cinema and other industries will usher in a golden period of sales during the Spring Festival. However, the epidemic has brought consumption to a standstill. The original plan was to take advantage of the “warm winter” to be able to sell goods during the Spring Festival. No one bought the popular spring and winter clothes. The clothing industry has not destocked smoothly, and the demand for fabrics will also be affected in the short term.
In addition, due to the serious overcapacity in the market in 2019, most weaving manufacturers had stockpiles of gray fabrics for at least a month before the shutdown. If the market recovers one day later, it will be difficult to realize the gray fabric inventory.
In addition, various negative factors such as the weak macro environment, slow recovery of terminal demand, and falling raw material prices are coming. Although the production capacity of fabric manufacturers has not recovered in the short term, the accumulation of inventory will not be fast, but there is still pressure to destock. It is also quite large. Manufacturers have a strong intention to destock, and the price of gray fabrics may fall further.
03 Factory rent and equipment��Depreciation, days without output are costs!
The editor still remembers asking a textile boss a question at the end of 2019: Since the market is so bad, why not take a holiday in advance? The textile boss replied: Labor issues, rent costs, equipment depreciation, etc., these are all reasons! This is why even in the fourth quarter of 2019, when the market was very poor, most weaving bosses still chose to endure it and not stop production at will!
For the same reason, now facing the longest holiday in history, textile bosses are also struggling with various intangible costs. Starting construction one month late means one more month of rent expenditure but no value output.
Taking Wujiang area as an example, the rent per square meter is about 300 yuan, and 100 looms occupy almost 1,500 square meters. The monthly rent cost is 450,000 yuan, not counting equipment depreciation, labor and other costs. .
In other words, the later the start of work, the greater the losses for textile companies. But in the face of the epidemic, everyone can only accept this fact. Mr. Shen, the owner of a textile factory in Wujiang area, said: “Now we start work strictly in accordance with the time specified by the government. After the start of work, it is a question of when the workers will arrive, and whether we can successfully receive orders. Anyway, the pressure in the first half of this year is very high.”
Of course, in the face of this pressure, the government and other relevant departments are also looking for ways to actively remedy and reduce the burden on enterprises:
1. Starting from February 3, the central bank will carry out 12,000 100 million yuan of open market reverse repurchase operations were invested to ensure adequate supply of liquidity. The overall liquidity of the banking system was 900 billion yuan more than the same period last year.
2. The five departments stipulate that enterprises that have difficulty repaying due to the epidemic can be extended and renewed.
3. Wujiang, Keqiao, Haining…each cluster has launched rescue policies: bringing substantial help to textile enterprises in terms of social security, rent, taxes, etc.
In any case, this silent war against the epidemic is still ongoing, and textile bosses can only count down silently in their hearts, hoping to produce as scheduled. Of course, you can also take advantage of your free time to think about how to improve your “hematopoietic ability” after starting work, so that you can get through this magical year 2020 smoothly. </p
