The reporter learned that since January, many textile companies have either set off on their own or participated in “order grabbing groups” organized by the government to fly to various continents around the world to get new orders and negotiate new investments. At the same time, many textile traders also said that foreign However, merchants during the Spring Festival are still making inquiries and placing orders. This phenomenon has also allowed market participants to feel the “temperature” of the market’s “recovery” at the beginning of the new year, and expanding new territories has become the biggest expectation of polyester textile “foreign trade people” in 2023.
Many foreign trade companies said that since the second half of 2022, affected by overseas market demand and other factors, the volume of foreign trade orders has fluctuated significantly, and they can no longer wait. At the beginning of the new year, more than 7,000 kilometers away, the International Home and Commercial Textiles Exhibition in Frankfurt, Germany, the world’s largest and most influential professional home textiles exhibition, attracted more than 400 Chinese companies. Domestic companies once again formed a group to start the New Year’s “going abroad” competition. The first shot of the order.
“As a major country in the traditional production and export of textiles and clothing, China’s domestic textile and clothing market has experienced the impact of orders shifting to Southeast Asia due to cost reasons. However, its complete domestic supply chain, textile and clothing processing technology and other advantages are difficult for other Southeast Asian countries to surpass. The resilience of the domestic manufacturing industry still exists,” said Pang Chunyan, chief chemical analyst at SDIC Essence Futures.
The latest import and export data released by China Customs recently showed that textile and clothing exports fell by 10% year-on-year in December 2022, and were negative year-on-year for 4 consecutive months. But exports in December increased by 9% month-on-month. “On the one hand, the export base in the second half of 2021 is high, and this inertia will continue into the first half of 2022. Overseas textile and apparel demand is already falling in 2022; on the other hand, domestic new crown infection prevention and control measures have also affected some international trade. . The month-on-month growth in exports in December was due to the accelerated recovery of domestic production after the optimization of epidemic prevention measures, and part of it was the export surge before the Spring Festival, showing multiple benefits.” Pang Chunyan explained.
From the perspective of foreign trade consumption, textiles and clothing are differentiated, with textiles continuing to fall month-on-month and clothing rising month-on-month.
It can be observed from historical data that the month-on-month increase in clothing exports in December is a seasonal manifestation. The annual high point of clothing exports occurs from July to September, the low point is in November, and the month-on-month increase in December. The high point of textile exports is generally around May, and then continues to decline.
According to Liu Siqi, a polyester analyst at Zijin Tianfeng Futures, orders in the domestic textile and apparel market will be weak in 2022. Affected by the epidemic, domestic and domestic consumption fell short of expectations. With overseas interest rates rising, expectations of recession in Europe and the United States increased. Textile and clothing exports declined in the second half of the year. “The peak season is missing during the year, terminal inventories remain high, and the inventory pressure of weaving and polyester finished products is relatively high, and load reduction is passive and active. This reflects the current market situation of weak overall consumption and weak demand in the domestic textile and clothing market in 2022.” She said.
However, domestic epidemic prevention policies have been optimized, overseas interest rate hikes have slowed, and the market is relatively optimistic about the recovery of external demand for textiles and clothing. In December 2022, Zhejiang, Chengdu, Suzhou and other places chartered flights to Europe, Japan and other places to attract investment and grab orders. It is expected that the textile industry in 2023 Clothing orders will improve year-on-year in 2022.
Liu Siqi said that Europe and the United States, as the main demand areas for global textile and apparel, will be under greater recession pressure caused by interest rate hikes in 2022. With the slowdown in interest rate hikes in 2023, the economy is expected to emerge from a weak recovery, which will have a certain impact on Asia, especially domestic textile demand. Support, it is expected that external consumption will recover to some extent after the Spring Festival.
However, according to Xie Wen, senior analyst at Wuchu Zhongda Futures, inflationary pressure will become more prominent in European and American countries in 2022. In order to suppress inflation, monetary tightening policies will put pressure on downstream consumption. Under the influence of the Federal Reserve’s sharp interest rate hike, although U.S. textile and apparel consumption has increased year-on-year, the growth rate has continued to slow down in the second half of 2022. U.S. apparel inventories are high and end-use textile and apparel consumption is poor.
“In 2023, with the slowdown in U.S. dollar interest rate hikes and U.S. consumption expectations gradually strengthening, the macro risks faced by the U.S. may be smaller than in the second half of 2022. The European and American markets are also expected to enter the recovery stage in the second half of 2023. But since the first half of the year “It is hard to be optimistic about the recovery of textile demand in Europe and the United States,” Xie Wen said.
Similarly, Pang Chunyan also believes that the current efficiency of logistics and production and processing will be significantly improved compared to last year. Therefore, the domestic order production and export environment will be significantly optimized. But at the same time, we are still facing expectations of an overseas recession. The decline in consumption and the backlog of inventories will weaken overseas import demand, and export pressure may still increase.
The current market sentiment is strong in anticipating a recovery in consumption. From a policy perspective, stimulating consumption is likely to be the key task of my country’s economic development in 2023. We will see the arrival of a demand inflection point. The main highlight of the textile and apparel market is the recovery of domestic demand.
Polyester terminal orders experienced a small peak in the off-season at the end of last year. Finished product inventories were significantly reduced. Weaving raw material stocking enthusiasm picked up. Production and sales increased. The average polyester inventory also dropped from a high of 25-30 days to a neutral level of 10-15 days.
The reporter learned that since December 2022, with the recovery of downstream production, the inventory pressure of polyester filament has continued to decline. By mid-January 2023, POY inventory has dropped to less than 10 days, and FDY inventory has been around 20 days. , both are down 20 days from the year’s high. The sharp decline in inventories of polyester factories means that the “sewer” at the end of the industrial chain has finally been cleared.
“The current situation of polyester yarnInventories have been transferred to downstream links, some of which are speculative stockings. The accumulation of inventories during the Spring Festival will continue, but the terminal consumption performance after the Spring Festival will determine whether this “traffic” will continue to be smooth. “In Xie Wen’s view, what needs to be paid attention to after the holiday is the arrival of workers and the performance of orders. “The overall impact of workers’ health on production is one week. The real key is the order, that is, whether terminal consumption can truly Recover and pass it upstream. ” she said.
In Liu Siqi’s view, with the decline in polyester inventory pressure and the repair of cash flow, the enthusiasm of polyester to resume production in advance has also increased. The resumption of polyester production after the Spring Festival in 2023 is expected to be concentrated at the end of January. After the Spring Festival in 2023, under optimistic expectations of domestic demand recovery, the polyester market may usher in the “Gold, Three, Silver and Four” peak seasons from March to April.
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