“Now is definitely the most challenging time for the development of the domestic textile industry,” stressed Mr. Zhang, who has been in the textile business for ten years. “Many people will tell you that the current market has various problems. , but I still think that the textile industry still has potential to be tapped.”
Since entering the textile industry in 2009, Mr. Zhang has experienced several waves of market ups and downs: in 2008, the 4 trillion yuan bailout brought the textile market to a boom, the most representative of which is simulation. Silk products, by 2012, the market had overcapacity, imitation silk changed from “hot pastry” to “big booming goods”, most conventional products were classified as “unsaleable products”, and the industry began a three-year trough period; until 2017, The environmental storm has swept across the motherland, and the trend of rectification, mainly focusing on water spraying and printing and dyeing, has also spread within the industry. The market capacity has tightened, leading to the emergence of a “golden” market that is “rarely seen in ten years”; in 2019, the market seems to be coming again. At the watershed, Mr. Zhang feels that many textile bosses are currently fighting in the low-end market, seemingly busy, but with lower profits or even no profits at all. This may be the beginning of a major reshuffle.
After surviving last year, but unable to survive this year, 2 businesses have The knitting factory is closed down!
For many companies this year, life is good, and they must survive this stage. “The current market situation has only gone bad for a few months, and it has not affected our company. However, if we do not transform or change our business ideas, the coming days may be more difficult. I don’t want to say that we will make a lot of profits this year, but we can Just hold on to the current situation.” said the person in charge of a textile factory in Shengze area.
According to relevant sources, two warp knitting companies have closed down recently. In the past two years, due to the overheating of the warp knitting market, many bosses crossed industries to seek gold. The bosses of these two companies also saw the warp knitting industry as a good opportunity to get involved in this industry in the past two years, but they encountered a weak market.
Take Haining area as an example. In 2017 and 2018, Haining area The company has introduced an excess of 1,300 production equipment KS warp knitting machines, an increase of more than 20% over the original equipment ownership, and the market supply has surged. However, end demand has not improved as expected. Since the second half of last year, the warp knitting market has plummeted due to overcapacity. Raw materials have fallen, and gray fabric prices have fallen even more sharply. In addition, the warp knitting machine has a large production capacity per day and consumes a lot of raw materials, so the boss needs more capital flow. If you are not careful, it is easy for the capital to break. “I survived last year, but I can’t survive this year. I am losing money every day, and with the lack of funds, I can only go bankrupt!” said an insider.
It is said that the Sino-US trade war has a great impact, but in fact it just “adds fuel to the fire”!
The recent turmoil in the Sino-US trade war has not subsided. It seems to be getting more intense. Recently, the famous American talk show host Trevor complained online about the United States’ suppression of Huawei. , also said in the hearts of many netizens that it is also popular in China. It can be seen that not only Chinese people, but also many American companies that have close ties with China also express disapproval. On May 20, 173 U.S. companies, including footwear giants such as Nike and Adidas, jointly signed an open letter to U.S. President Trump, hoping that the United States would stop imposing additional tariffs.
CNN
Nike and Adidas versus Trump:
For shoes tariffs would be “disastrous”
In the past year or so, the most direct impact of Sino-US trade friction is that bilateral trade has declined significantly. For example, from January to April this year, US exports to China fell by more than 25%, and China’s exports to the US There has also been a decline, which affects consumers and businesses in both China and the United States.
For a home textile fabric company with the European and American markets as its main customer base, the number of orders received by the company has declined since June. The person in charge of the company said: “In the past, in the early stage of every tax increase, end customers We always place some orders in advance to make reserves, but this time there is no movement from customers. They are all waiting and watching. As a result, our new orders this month are not concentrated. Customers are following the order step by step, and we can only accept it.” In addition, , a textile fabric company also said that the Sino-US trade war is only one factor in the decline in sales this year. Now many customers are waiting and waiting for proofing, and the order placing speed is relatively slow. Of course, some textile companies have found new opportunities, especially countries along the “One Belt and One Road”. They have relatively large demand for textiles and have large room for development.
What may really cause the market to reshuffle may be…
The answer is: overcapacity!
In fact, this phenomenon began to appear as early as the second half of 2018. From a visit to the textile market, we learned that in the third quarter of 2018, affected by the sharp rise and fall in the raw material market, the hot market in the early stage came to an abrupt end. What greeted everyone was “the peak season is not prosperous” and “copper nine and iron ten”. The market has developed.There was a weakening signal. Although around the Spring Festival, the fabric market ushered in a wave of purchasing, which temporarily stabilized the mentality of textile people, the market began to slowly “cool” after the Qingming Festival. Both garment factories and weaving manufacturers are beginning to worry about the market outlook. Peripheral loom production capacity has been launched one after another, and clothing-end inventories have increased, which shows that the imbalance between supply and demand is intensifying and the market has excess capacity.
Judging from the operating rates of the main clusters in Jiangsu and Zhejiang, the average operating rate of the main weaving clusters in Jiangsu and Zhejiang was 75% in May this year, while it was 85% in the same period last year, and Shengze last year Due to environmental protection issues, textile enterprises in the region have been in a state of “three starts and one stop”. If normal production is carried out according to the current situation, the start-up rate will be even higher. This also shows that without the pressure of major environmental protection policies this year, the production enthusiasm of textile enterprises On the contrary, it is not high, especially for circular knitting and warp knitting manufacturers. The current operating rate of circular knitting machines in the Xiaoshao area is 50-60%. Many Shaoxing manufacturers said that they currently have “no orders to accept” and can only reduce the start-up to relieve inventory pressure.
The era of mass production is dead!
A few years ago, textile bosses used large production capacity to seize market share, but now in the environment of overcapacity in the market, this path seems to be unavailable. At present, textile companies are facing increased production costs, poor sales, and increased inventory of gray fabrics. They are feeling more pressure and the market is undergoing a major reshuffle. “A friend told me that this year is the worst time in the past ten years, and he also told me that it may also be the best time in the next ten years!” said a textile friend.
Indeed, the trade dispute between China and the United States continues to intensify, Southeast Asia is still grabbing market share with low cost, and many “Big Mac” clusters are still rising in the central and western regions of China. The survival space of the terminal goods market is getting smaller and smaller. Of course, the worse the market situation is, the more companies are thinking about ways out. Many medium-sized companies have begun to develop new products, improve supporting equipment, and find new customers. Therefore, the coming days will be bitter or sweet for companies. It is really “like a person who knows whether drinking water is cold or warm”!
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