OPEC slashes oil demand forecast!
On Wednesday (October 12) local time, OPEC lowered its 2022 world oil demand growth forecast in its monthly report, the fourth time since April. OPEC also lowered its oil growth forecast for next year, citing high inflation and a slowing economy, among other factors.
OPEC’s monthly report shows that global crude oil demand growth is expected to be 2.64 million barrels/day in 2022, down from 3.1 million barrels/day previously; global crude oil demand growth is expected to be 2.34 million barrels/day in 2023, a decrease of 36% from previous expectations. million barrels, to 102.02 million barrels.
OPEC said in the report: “The global economy has entered a period of increased uncertainty and challenges, with continued high inflation, tightening of monetary policy by major central banks, high levels of sovereign debt in many regions, and continued supply chain problems.”
The decline in demand prospects provided a reason for OPEC+ to cut production last week. OPEC+ announced last week that it would cut production by 2 million barrels per day to stabilize oil prices. The scale of this production cut is the largest since 2020.
The Saudi Energy Minister attributed the production cuts to various complex uncertainties, while many institutions lowered their expectations for economic growth.
U.S. President Joe Biden strongly criticized OPEC+’s decision to cut production, saying it increased oil revenue for Russia, an important member of OPEC+. Biden threatened that the United States needs to reassess its relationship with Saudi Arabia, but he did not specify specific measures.
OPEC also lowered its forecast for global economic growth this year to 2.7% from 3.1%, and its forecast for economic growth next year to 2.5%. OPEC warned that major downside risks still exist and the global economy is likely to weaken further.
Crude oil has fallen for many days in a row, and consumer demand has performed poorly, casting another shadow on the market. Due to cost reduction, factory shipment demand and other reasons, most chemical fiber factories have generally reduced prices by 100-200 today. For some customers who are in urgent need, this price reduction may be a purchasing opportunity. However, for many texturing and textile factories, the current price fluctuations, poor market performance, and increased risk of inventory backlog are really miserable.
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Clothing has recovered, and sports and outdoor performance are eye-catching
According to the latest research report of GF Securities, upstream textile manufacturing companies are mainly engaged in export business. Since the third quarter, many listed companies have been affected by the reduction or delay of orders by downstream overseas brand customers, mainly due to the impact of the Russian-Ukrainian war and overseas inflation on terminal consumption. The continued fluctuations in demand, including the supply chain, have led to an increase in in-transit inventory of some overseas brands. Therefore, it is expected that the performance growth rate of many listed companies in the third quarter of 2022 will be slower than that in the first half of 2022.
Downstream clothing and home textiles will benefit from the industry’s recovery in the third quarter of 2022. Although the domestic epidemic situation continues to recur, the overall trend is improving. Therefore, it is expected that the performance growth rate of many listed companies in the third quarter of 2022 will be better than that in the first half of 2022.
Listed companies related to the sports and outdoor sub-industry benefit from changes in clothing styles. In the post-epidemic era, consumers pay more attention to improving health through exercise and outdoor activities, including the rise of exquisite camping, and their performance growth is expected to be significantly higher than other sub-industries.
It is worth mentioning that there are also new opportunities in the outdoor segment. According to Kearney data, the size of China’s sports and outdoor products market is expected to reach 599 billion yuan in 2025. At the same time, the outdoor products market represented by mosquito repellent spray, tents, outdoor tables and chairs, camping trolleys, picnic mats, camp lights, etc. is hot. Categories are emerging and experiencing explosive growth.
Combining two sets of industry data, it is not difficult to see the future development direction of the outdoor sports market
Although the overall consumer market was weak in the first half of this year, Jiaoxia, which focuses on the “urban outdoor” track, has achieved “reverse growth.” On October 10, Jiaoxia updated its prospectus and continued to hit the “number one urban outdoor stock”. Judging from the updated content, Jiaoxia’s revenue in the first half of 2022 reached 2.21 billion yuan, a year-on-year increase of over 81.3%, and its net profit was as high as 4.9 billion.
It is reported that from 2019 to 2021, Jiaoxia’s compound growth rate is eye-catching, achieving four-digit growth, reaching 1429.3%. At the same time, Jiaoxia also maintained rapid growth in many fields such as hats, accessories, and shoes. Specifically, the hat category grew by 65.2% year-on-year. The year-on-year growth rates of other accessories and other products in the first half of the year were 127.5% and 213.4% respectively. %, forming a multi-category revenue expansion, which is really enviable.
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