February is usually the traditional off-season for sales in the foreign trade industry, but during the Spring Festival in the Year of the Tiger, my country’s fabric foreign trade market showed a trend of “not off-season but not off-season”. What caused the market to reverse? What opportunities and challenges will the fabric foreign trade market face this year?
Off-season is not slow
Orders keep coming
The Spring Festival holiday has just passed, and while textile companies are ushering in a “good start”, orders are also booming.
In the production workshop of Tongyi (Quanzhou) Light Industry Co., Ltd., more than 100 dyeing machines are operating at full capacity and workers are busy at various jobs. “We currently hold orders for more than 500 tons of fabrics. Judging from the current production and operation situation, we are quite optimistic.” said Li Zhenzhuo, general manager of the formula.
Jinjiang Sanfu Textile Industrial Co., Ltd. has also had sufficient recent orders, with orders already scheduled until July. The company’s products are mainly sold to Europe, the United States, Japan, South Korea, Southeast Asia and other countries and regions. In order to fulfill orders, during the Spring Festival, 60% of the company’s employees chose to celebrate the New Year on site, with more than 500 employees on duty.
The ninth branch of Zhejiang Yingfeng Technology Co., Ltd. officially resumed production on the tenth day of the first lunar month. “We have reached intention orders with many foreign trade companies years ago.” Li Weixiong, director of the factory, said that the first vat of fabric produced in the Year of the Tiger will be sent to Iran, Kuwait and other countries. “About five to six hundred cylinders of cloth can be produced today, and more than 3,000 pieces of gray cloth can be shipped in the evening. Overtime work is inevitable during this period.”
“Since December 2021, the company’s orders have begun to increase, and the order receiving speed and order volume are in a relatively good period in history. At present, the company has ample orders on hand. Judging from the current number of employees in place, the company’s production capacity has been dynamically saturated. Zhang Keming, secretary of the board of directors of Luthai Textile Co., Ltd., said that after the overseas epidemic was effectively controlled in 2021, overseas market orders have effectively recovered, and the company’s order situation has improved quarter by quarter. The company’s order situation since the fourth quarter of 2021 has been better than in previous years, and the order situation in the first quarter of this year is also relatively optimistic. “The comprehensive capacity utilization rate of the company’s factories now exceeds 80%, but it was around 70% in the first half of last year.”
Previously, many people believed that after Christmas last year, the highlight moment of China’s textile foreign trade companies had passed. Coupled with the long New Year’s Day and Spring Festival holidays, the booming exports in the first quarter of this year may not be sustainable. However, the current market situation has exceeded the predictions of some industry insiders.
Functional fabrics
Be the main force
The reason why foreign trade fabric companies have received relatively hot orders recently is that, in addition to the rising international competitiveness of “Made in China”, the deeper reason is that corporate technology continues to innovate, and functional fabrics play an increasingly important role in the market, showing a huge market potential.
In the past two years, Sanfu Textile has continued to innovate and upgrade its products. It is understood that the company’s independently developed high-conductivity fabrics that are warm in winter and cool in summer, elastic skin-feel fabrics, ultra-light fabrics and other leading products are very popular in the market. At present, the company has formed an overall layout of the industrial chain from yarn to weaving to dyeing and finishing. The upstream and downstream complement each other and can provide guarantee for its orders.
Tongyi Light Industry attaches great importance to scientific research investment and the transformation of scientific and technological achievements, and accelerates the development of more new fabrics. The company’s environmentally friendly high-end knitted elastic fabrics, antibacterial and deodorant functional knitted fabrics, far-infrared warm knitted fabrics, xylitol cooling skin care fabrics, collagen skin care fabrics and other products are exported to Japan, Europe, the United States, Africa and other countries. and region.
At present, the domestic functional fabric market is ushering in a new round of rapid growth, and more and more fabric companies are actively entering the market.
Shaoxing Jia Simin Textile Co., Ltd. specializes in various types of children’s clothing fabrics. “Affected by the epidemic and the multiple attacks from adult clothing companies and fast fashion brands, children’s clothing fabric companies can only find a place for corporate development by stepping up their efforts to develop their own skills, speed up the research and development of new materials and fabrics, and open up a path for differentiated development for brands. “The relevant person in charge of the company said that the company will design and develop an average of 100 new varieties in the first quarter. Researching and developing new fabrics will indeed add a lot of costs to the company, including the cost of imported raw materials, production costs, and testing fees from professional institutions, etc., but it is all worthwhile because companies must take the route of innovation.
In this regard, some industry experts pointed out that after overcoming the difficulties of rising raw material prices, rising labor costs, and sharp increases in sea freight last year, my country’s foreign trade companies have stepped up product upgrading and enhanced the technological content of their products, allowing the global market to There is increasing recognition of Chinese textile products.
under pressure
more motivated
Although the increase in orders and the improvement of technology have injected confidence into the industry, repeated global epidemics, divergent economic recovery, rising commodity prices, energy shortages, shipping tensions and other risks are intertwined, which has also put certain pressure on textile foreign trade companies. Some reports predict that global economic growth will drop from 5.5% in 2021 to 4% in 2022, and will further drop to 3.5% in 2023. Debt risks, credit risks, etc. continue to accumulate.
Liao Hongying, who has many years of experience working in textile companies in Ethiopia, Cambodia and other places, told reporters frankly that in the past year, global shipping…The market turmoil has affected the operations of many textile companies to a certain extent. It is still unknown when shipping costs will return to normal. She suggested that in order to balance the growing orders with high shipping costs, companies can change from the CIF (CIF) model to the FOB (FOB) model, that is, the supply company only needs to pay for the land transportation of the goods to the domestic port, and other Fees are paid by overseas customers.
As for the difficulties that fabric companies are still facing in their development, Liao Hongying said frankly that at present, the exchange rate market has gone up and down, and two-way fluctuations have become the new normal. Many orders cannot lock in long-term prices, which makes it easy for friction to occur on order prices, leading to my country’s Enterprises are in a dilemma.
In addition, it is worth noting that increasing revenue without increasing profits has become a difficult problem facing textile companies. Wan Gang, deputy general manager of Qingdao Jifa Group Co., Ltd., said that rising raw material prices have a greater impact on the company’s production and operation activities. “Since the settlement is based on the pre-agreed contract price, the unit price of the company’s export products currently changes slightly, and it is highly likely that the price of the company’s products will rise in the future.” Wan Gang said.
In response, governments from the national level to local governments have introduced active measures to stabilize foreign trade. Nowadays, many places are formulating lists of tasks and measures to stabilize foreign trade in 2022 to help companies stabilize orders and increase profits. Among them, seizing the dividends of the Regional Comprehensive Economic Partnership (RCEP) and promoting the development of cross-border e-commerce and other formats have become important points, providing new momentum for foreign trade to rise despite the pressure throughout the year.
At present, many provinces and cities are combining their own advantages and development characteristics to study policy measures and action plans for targeted docking of RCEP. For example, Zhejiang, a major textile foreign trade province, released a three-year action plan (2022~2024) for the implementation of RCEP, proposing 21 key tasks and measures, and clarified that by 2024, the total volume of trade in goods between Zhejiang Province and other RCEP countries will strive to reach the total volume of Zhejiang Province. 28% of the total, and the service outsourcing execution volume undertaken by other RCEP countries exceeded US$3 billion.
Looking forward to the whole year, industry experts pointed out that the economic operation of the textile industry still has the conditions and foundation for stability and improvement, but the complexity and severity of the development situation cannot be ignored. The textile industry should continue to consolidate its advantages in advanced manufacturing and actively seize opportunities such as green and low-carbon transformation and the “ice and snow economy”. The domestic and international dual cycles will surely become smoother, and the road to high-quality development of my country’s textile foreign trade will surely become wider and wider.
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