February 1st (the eighth day of the first lunar month) is originally a good day for textile people to open the market. “8” means “fa”, which means “fafafa” in the new year! However, the unpredictable epidemic made the eighth day of the first lunar month of this year a little deserted.
Let’s first take stock of four things that are closely related to textile people recently:
1. Affected by the pneumonia epidemic caused by the new coronavirus, after the Spring Festival, domestic The resumption of work of enterprises in various clusters and regions has been postponed. In late January, most companies issued a statement: work would start no earlier than 24:00 on February 9!
2. On January 31, the World Health Organization informed the world that the new coronavirus pneumonia epidemic in China constituted a public health emergency of international concern, on the grounds that the new coronavirus pneumonia epidemic has the possibility of a global outbreak.
3. In the near future, the wave of returning to the city is coming. After the epidemic, how many non-local workers will be on duty?
4. At 23:00 local time on January 31 (7:00 a.m. Beijing time), the United Kingdom officially left the European Union, ending 47 years of EU membership.
It seems that the “black swan” of the pneumonia epidemic has tightly grasped the heartstrings of textile people, and the current impact is still unpredictable. China’s exports and China’s economy will face a big test, and the textile industry is no exception!
Production has basically come to a standstill and all orders have been postponed!
“Originally we planned to start shipping after work on the eighth day of the Lunar New Year, but now we can only postpone it!” Mr. Yang, a trader in Wujiang said, “We have not started work now, and we plan to start shipping on February 9th. After that, we will decide on the start time based on the notice.” Some textile companies have also issued supply notices that “delivery dates are uniformly arranged after February 15.”
As for production, since the prevention and control of the epidemic requires the population to avoid large-scale movements and gatherings and isolate for prevention and control, the return of workers to the city and the resumption of factory work have been delayed. Companies have stopped work and reduced production, and textile production companies are basically at a standstill in the short term.
Based on the situation in Guangzhou Zhongda, Wujiang Shengze, Keqiao Shaoxing and other clusters, companies plan to start construction as early as February 10 (the seventeenth day of the first lunar month), which is generally 7-7 days ahead of the pre-holiday plan. 9 days postponement. And according to the boss of the textile company, February 10 is only a tentative plan to start production, because the textile industry is a labor-intensive industry, and many factory workers are employees from other places. Therefore, the actual resumption of production still depends on the epidemic control situation and the arrival of foreign employees. Make adjustments to the job situation.
“I feel very optimistic that the factory can resume normal production at the end of January. 80% of our factory employees are from other places.” Yifang Mr. Chen, the owner of the company, said.
Being classified as “PHEIC”, domestic demand and foreign trade will be affected in the short term!
Recently, the World Health Organization held a press conference to inform the world about the results of the meeting: the new coronavirus epidemic in China constitutes a Public Health Emergency of International Concern (Public Health Emergency of International Concern). , PHEIC) This makes the textile people who wake up even more worried. It can be seen that the impact of the epidemic is still escalating, both in terms of the epidemic itself and the economy.
For enterprises, both domestic demand and foreign trade will be affected to varying degrees:
In terms of domestic trade, according to As usual in previous years, the peak season for the domestic trade market in the first half of the year is from March to May. After the company starts work on the eighth day of the Lunar New Year, it will ship to major domestic markets, such as Guangzhou Zhongda, Keqiao Textile City, etc. Now all major textile cities have issued notices delaying the resumption of work. Due to the serious impact of the epidemic in Guangzhou, the opening time of the medium and large markets has not yet been determined, which resulted in the domestic sales time being compressed in the first half of this year. In addition, downstream customer companies have not yet started work, and order negotiations cannot begin. This has had a negative impact on the market.
In terms of foreign trade, the most direct impact is the transportation of goods. If the prevalence of the virus increases, ships carrying cargo are likely to be denied berth. Recently, a similar incident occurred:
According to foreign media reports, due to excessive concerns about the new coronavirus epidemic, a large container ship named YM WARRANTY owned by Yang Ming Shipping was once in Piraeus, Greece. The ship was refused berthing at the Port of Bess, and the ship drifted outside the port for 12 hours before being able to berth.
▲Related media reports
It can be seen that within the 3 months of the existence of “PHEIC”, the foreign trade delivery cycle There is strong uncertainty. In addition, for most foreign trade people engaged in textiles, this February is basically worrying. In addition to foreign terminal customersIn addition to concerns about the safety of domestic products, production capacity that has not yet been restored will also cause some orders to be transferred to Southeast Asia.
“Although many of our orders are rushing to be shipped before the end of the year, and most of the orders after the end of the year have not finalized the delivery date, so there is still room for negotiation, but the foreign trade environment in the first half of the year is not ideal. I think After the start of construction, the order situation will be worse than expected, but if the total foreign trade demand remains unchanged, then the cost of production suspension caused by the epidemic can be solved. The key lies in the total demand.” said Mr. Wang, a foreign trade boss.
The impact of the pneumonia epidemic may be greater than that of the SARS period
Since the war against the epidemic began, textile bosses are worried that epidemic prevention and control will lead to increased costs, delivery delays, customer Loss, loan default. Today, this concern is increasingly urgent.
Many market participants compare this epidemic with the economic conditions of the industry during the SARS period, but what cannot be ignored is that the macro environment at this time is far from comparable to that time.
China had just joined the WTO during the SARS period in 2003. The international situation was very good, foreign trade exports were growing rapidly, the domestic demand market was also very good, and the industry was in a boom cycle. In 2019, the global economy was originally in a recession cycle, and the GDP growth rate dropped to 6.1%. Originally, many economists were not optimistic about the macroeconomics in 2020, and the market was in a stage of overcapacity. Therefore, if the industry wants to return to normal in the short term, The post-SARS market situation is still stressful.
The crisis is about to turn around, and the market may encounter a big market after “thawing”
Of course there is” “Crisis” must bring “opportunity”. Although the “timing” is not as good as that of the SARS period in 2003, there will still be an explosion in demand to a greater or lesser extent. After all, this epidemic will give consumers a “vacuum period” of consumption for at least two months. After the epidemic is over, due to tight delivery times, insufficient production capacity, rising prices and other factors, downstream transactions will increase, which will inevitably stimulate the growth of the textile industry. demand, the market may turn optimistic.
In addition, there are also favorable releases in foreign trade. On the one hand, since the signing of the first-phase economic and trade agreement between China and the United States, the macroeconomic outlook has been favorable. After the epidemic is over, the second round of the agreement is expected to begin, and U.S. orders that were suppressed in the early stage may be issued. On the other hand, after the UK leaves the EU, it will be more convenient for “Made in China” products to enter the UK.
According to customs statistics, textiles and raw materials should be imported from around the world in 2018 at US$30.928 billion, with imports from China accounting for 19.94%. This shows that the Sino-British bilateral trade market is stable. The UK still relies mainly on imports of mid- to low-end textiles and clothing. Affected by Brexit, the depreciation of the pound will cause the British consumer purchasing power to weaken. Then, Chinese textiles are high-quality and low-priced. During this period, it is very conducive for companies to enter the British market, expand the proportion of the British market, and increase market share.
The sunshine always comes after the storm!
Dear textile friends, the national crisis is facing us, and the government must take responsibility to relieve the people’s difficulties. Everything must be done without delay. We textile people must take responsibility and contribute to winning the war against the epidemic! (Continue to “stay” at home and not cause trouble to society~~)
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