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Since the outbreak of the New Crown epidemic and continued proliferation, global textile production and orders have continued to fall, and retail sales have plummeted, which may continue to be a long-term downturn. The sharp weakness in apparel consumer demand in the international market directly leads to the product structure of my country's textile and apparel exports. Although some European countries have gradually relaxed control policies and signs of recovery in the global supply chain, overall, the negative effects on the impact of the industrial chain are inevitable.
Halfway through 2020, entering July, the textile industry enters the traditional off-season. Whether it is domestic demand or foreign trade, the pressure on the textile industry chain has doubled, and SMEs may continue to be under pressure.
01 Domestic demand: the prelude of the off-season, companies under pressure
Judging from consumption habits and the timing of downstream inventory replenishment, July and August will enter the off-season, and the orders will be in a state of nowhere. Industry experts said that from June to September, some SMEs may face pressure to reduce production, shut down, take vacations or even shut down.
02Foreign trade: a prelude to holidays, fewer orders
The EU generally takes high-temperature holidays from July to September, and France, Italy, the Netherlands and other countries have to take at least one month. Therefore, the export orders in the market in July are relatively small, and they will increase again after August and September. Therefore, the downstream market in July is generally not optimistic. If it is fast, the market will not improve until August.
03 Production status: the market is weak, the stage is insufficient
According to the survey on the production of weaving companies in the cotton textile cluster, the cluster weaving market has been weak since June. As of the end of June, the average operating rate of cluster weaving companies was around 50%, and the utilization rate of weaving capacity was below 40%.
Most clusters said that business operations in June have not improved compared with May. Due to the epidemic situation and the combination of factors such as the arrival of the traditional off-season, market demand is weak and product inventories continue to increase. Problems such as lack of corporate orders and heavy funding pressure still exist. The enterprise adjusts production, lowers the opening stage, and maintains operation.
The advent of the off-season 04: limited shipments, reduced production and guaranteed price
From the current point of view, the textile peak season in the first half of the year has basically passed. In July or only there will be sporadic trading volume on the stocking mentality, the price upward pressure is greater, the demand side is currently not significantly improved, and foreign orders are still facing repeated epidemics. Risk, shipping is relatively limited. Therefore, it is expected that in the off-season market from July to August, if there is no obvious improvement in downstream demand, enterprises may adopt a strategy of reducing production and insuring prices in the future.
05 The market is expected to weaken in July, waiting for the market to pick up
For the market in July, most textile people are still mentally prepared. After all, according to historical conditions, if there is a big market in the textile market, it generally occurs from March to September, October to October, and the big market is generally not likely to happen from July to August. The pressure of accumulating inventory is just that this year's inventory pressure is too huge and may not have been encountered in the past six years.
Therefore, it is necessary for textile people to recognize their position in the chaotic world, consciously limit the inventory, rather than blindly produce, turn the funds into inventory, and avoid falling into a difficult situation under the pressure of competition.
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