Apparel / Textiles & Accessories

Various hot events have emerged in the market recently. The global epidemic is increasing due to the new delta virus. Ocean freight has risen every week. Container freight on China-U.S. routes has soared five times to US$20,000... In the off-season of traditional textiles in August, these news have For textile people, it is "worse worse." The peak season market in September and October should be a step closer with the arrival of August. This August market should also be busy with preparatory work, but in fact the market is more deserted on the eve of the peak season, and the peak season has been greatly delayed. Even cancel the posture of the peak season.

Normally, July and August are the traditional textile off-season, and the textile market will not change much in these two months. However, since August is approaching the peak season, the weaving market has always been preparing for stocking in advance, so the weaving market in August will have a clear upward trend compared to July. In 2019 and 2020, the weaving operation rate in Jiangsu and Zhejiang regions began to rise sharply at the end of July and early August. But this year this trend is very unobvious, and even the operating rates of major textile clusters have declined to varying degrees after entering August.

According to recent surveys on the textile market in Guangdong, Jiangsu, Zhejiang and other places and some foreign trade companies, weaving, fabrics, clothing and other terminals have been receiving orders smoothly since July. Basically, they have been able to start up at more than 80% or even full load. "Indifferent but prosperous" pattern. However, the concerns of some textile and apparel companies have also risen, and their expectations for the "Golden Nine, Silver and Ten" continue to decline.

Many companies reported that since July and August, the orders received in developed countries such as Europe, America, Canada and other developed countries are mainly Christmas and Easter (especially the return orders from Southeast Asia are more obvious). They were placed 2-3 months earlier than previous years. Low-grade, poor profit, but long-term order and delivery time, foreign trade, textile and clothing enterprises have relatively sufficient time to purchase raw materials, proofing, production and delivery.

Due to the early overdraft of the "Double Festival" orders, the order and export situation of textile and apparel enterprises from October to November may be significantly lower than expected. According to the feedback from exporters in Shaoxing, Yiwu, Zhejiang, domestic and foreign buyers began stocking after February and March this year. The peak sales season for cotton yarn, grey cloths, and fabrics has arrived ahead of schedule. The production load of the entire textile and apparel industry continues to be high, but overdrafts ahead of schedule. The impact of consumption has also begun to manifest. Since August, the stocking tide of terminal buyers has gradually faded, and the textile market has scattered companies that make samples and obtain goods.

There is no order, and the order is reduced, resulting in the weaving start-up rate has no meaning to increase. However, the characteristics of weaving ahead of schedule determine that the current reduction in operating rate is obviously not only a performance of the current poor market, but also a lack of confidence in the future textile market.

As for the reasons for this year’s "Double Festival" orders coming a few months in advance, the industry generally analyzes the following:

First, due to the continuous sharp increase in ocean freight and the “hard to find one ticket” for containers, foreign buyers and retailers place orders in advance to ensure that Chinese processing companies can schedule, ship, and deliver orders on time, without affecting Christmas consumption and supply;

Second, the prices of bulk commodities have continued to rise since 2021, and the cost of textiles and clothing has continued to rise. It is beneficial to both buyers and sellers to place orders in advance. Foreign retailers and purchasers have locked in supply and costs in advance, while domestic textile and clothing companies have increased their dips. Procurement of cotton, cotton yarn, etc., to weaken the interference of external factors;

Third, there is concern that the significant adjustment of the RMB exchange rate will help domestic textile and apparel companies to avoid exchange rate fluctuation risks through various methods such as export bills, using financial instruments to lock in exchange rates and profits, and shortening the foreign trade business account period.

In July, an argument that often appeared in the market was that this year's textile market was "not busy in the peak season and not weak in the off-season". The performance of the textile market in the past few months has made people mistakenly believe that this year’s off-season will have its own height, but in fact, this wave of off-season orders is likely to be the textile market after the overdraft. How much can you expect from the traditional peak season in September and October? Woolen cloth?