Flame retardant fabric_Flame retardant fabric_Cotton flame retardant fabric_Flame retardant fabric information platform Flame-retardant Fabric News “Cold weather” is approaching, entering a gap period two or three months in advance? What happened to the market?

“Cold weather” is approaching, entering a gap period two or three months in advance? What happened to the market?

Textile and apparel export growth hit the brakes in August, decreasing by 14.7 percentage points. The overseas consumer market is weak and orders are being diverted from Southeast …

Textile and apparel export growth hit the brakes in August, decreasing by 14.7 percentage points. The overseas consumer market is weak and orders are being diverted from Southeast Asia. Foreign trade companies have already felt the abnormality in orders.

The “Golden Nine” is coming to an end, but many industry insiders have expressed caution about the future market. Large enterprises are having an easier time with more stable customers and production capacity in Southeast Asia. However, small and medium-sized enterprises have clearly felt the “cold”. “Many small factories have not received orders this year. We expect to enter the gap period two or three months in advance and let workers go home for the holidays early.” A clothing company owner said.

Textile and clothing export growth slows down

According to customs data, my country’s textile and apparel exports in August were US$30.976 billion, with a year-on-year growth rate slowing down 14.7 percentage points from 17.58% in July to 2.88%. Among them, the year-on-year growth rate of textile exports dropped from 16.2% in July to – 0.23%, and the year-on-year growth rate of clothing exports slowed to 5.10% from 18.55% in July.

Industry insiders mentioned that the transfer of textile orders to Southeast Asia this year has also had an adverse impact on exports. “What Southeast Asia has taken away are domestic factories that make more basic models. The relatively high-end ones are still in China. But in fact, for the industry, basic models are the most important. Although the profit is thin, the volume is large and the proportion is large. , which can support the factory’s production and ensure profits.”

A textile industry analyst said that two trends are emerging in the industry: first, the dependence on the export of textile and apparel products is higher, and second, the textile and apparel production capacity in Southeast Asia and African markets is growing rapidly, and domestic textile exports may have a risk of decline in the future. .

The base of Southeast Asia’s textile exports is low, and the industrial structure is not very sound. Raw materials such as cotton are dependent on imports. There is still a gap between China and China in terms of production scale, industrial level, and raw material costs, so the impact of order transfer is limited.

“Cold” is approaching small and medium-sized enterprises

Large companies can still “carry”

A recent questionnaire survey conducted by the China Council for the Promotion of International Trade among more than 500 companies showed that companies are currently facing major difficulties such as slow logistics, high costs, and few orders. 62.5% of companies said that orders are unstable, with many short orders and small orders, and long-term orders. Large orders and small orders. The market downturn and lack of willingness to consume have made it more difficult for textile and apparel foreign trade companies to obtain orders.

On the other hand, the increase in order volume and export volume is not directly related to corporate profits. The boss of the above-mentioned textile foreign trade company told a reporter from the Financial Associated Press that even if the order volume is guaranteed, the company’s profits are still eroded by multiple factors. “Textile orders exported to Japan first face the fluctuation of the Japanese exchange rate, and Japanese stores basically do not increase in price.” Commodity prices, this part of the loss is borne by Japanese traders, Chinese traders, and Chinese factories, so our profits have dropped particularly significantly this year. In addition, the price of raw materials in the domestic market has generally increased, including electricity charges, steam charges, etc. have increased significantly. Awesome. The net profit margin of our products is expected to drop by at least 2-3 percentage points.”

The above-mentioned industry insiders further said that companies with capital strength will transfer production capacity to Southeast Asia and effectively control costs through industrial chain layout. However, for many small and medium-sized enterprises, they can only “take orders when there are orders and stop production when there are no orders.” This means that industry elimination is accelerating.

Insufficient consumption power makes it difficult for the industry to be optimistic

Many industry insiders have expressed caution about the future market. A cotton textile company mentioned to a reporter from the Financial Associated Press, “Despite the Golden Nine and Silver Ten, the domestic market has not seen obvious prosperity, and the same is true for foreign consumption.”

Vietnam’s textile exports are also affected by falling demand. According to the Economic and Commercial Office of the Consulate General in Ho Chi Minh City, in the first eight months of this year, Vietnam’s textile and garment industry exports were approximately US$30.2 billion, a year-on-year increase of nearly 20%, averaging US$3.7 billion to US$3.8 billion per month. However, it is expected that the remainder of this year will In the next four months, exports were only US$3.1 billion-3.2 billion per month. Several businesses in Ho Chi Minh City have seen a sharp drop in export orders, mainly from the United States and the European Union (EU), as consumers there tightened spending amid inflation. Vietnam’s textile and clothing exports reached $30.1 billion in the first eight months of this year, but this was mainly generated in the first few months of the year, said Pham Xuan Hong, president of the Ho Chi Minh City Textile Embroidery Association.

A news agency quoted him as saying that since July, these companies have been facing several difficulties, including reduced export orders.

Demand for high-end apparel made from recycled cotton fiber will slow in the second half of 2022, according to analysis by VNDirect Research, which said U.S. customers have shortened order cycles to three to six months before delivery due to High inventories and inflation. Currently, only a few large companies have enough export orders for the third quarter of 2022, while orders for the fourth quarter have also slowed due to inflation concerns. The Vietnam Leather, Footwear and Handbags Association said the industry’s exports will definitely be affected as the year comes to an end due to inflation and reduced consumer demand in major markets. The association said that shoe companies have been forced to reduce overtime hours, and some shoe companies have negotiated with partners to accept orders signed during the epidemic to maintain operations and ensure employee income. Le Tien Truong, chairman of Vietnam Textile and Apparel Group, predicts that the market downturn will continue until 2023.

Shenzhou International also mentioned: “It is expected that from the second half to the first half of next year,� The textile and apparel industry may suffer from the impact of reduced capacity utilization due to insufficient demand. Global inflationary pressure will continue, and corporate profits will continue to be under pressure. ”

Judging from the total textile and clothing exports from January to August, the growth rate still maintained double digits, reaching a year-on-year growth rate of 11%; of which textile exports were US$102.27 billion, an increase of 10.2%, and clothing exports were US$118.03 billion, an increase of 11.6% .

Even if the peak season is not busy, it is still a peak season and the increase will be guaranteed. With the arrival of the traditional peak season of “Golden Nine and Silver Ten”, China’s textile and apparel exports are still expected to gradually increase in volume, and the month-on-month growth rate is expected to turn positive. Faced with positive support such as improving demand, falling inventories, and rebounding costs, as well as the depreciation of the RMB, which enhances the international competitiveness of export companies, China’s textile and clothing export situation is expected to improve.

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Author: clsrich