For textile people who experienced the “worst season in history” the year before last, the market style in 2021 is a bit “unpredictable”, but there is no doubt that the textile market is indeed picking up!
Strong post-pandemic recovery
Net profit growth of 114 listed home textile and clothing companies
In 2021, the vast majority of textile and apparel products will usher in a recovery in demand after the epidemic. According to data from the Bureau of Statistics, from January to November 2021, industrial enterprises above designated size in the textile industry achieved operating income of 2.28681 billion yuan, a year-on-year increase of 10.2% ; Achieved total profits of 100.8 billion yuan, a year-on-year increase of 4.6%; enterprises above designated size in the textile, clothing and apparel industry achieved operating income of 1.33031 billion yuan, a year-on-year increase of 7.7%; realized total profits of 66.69 billion yuan, a year-on-year increase of 12.6%. In addition, from January to October 2021, exports of clothing and clothing accessories were US$138.9 billion, a year-on-year increase of 25.2%.
Whether it is performance or profit, the textile and apparel industry will improve significantly in 2021 compared with 2020. According to statistics from Tonghuashun, among the 114 listed companies in the textile and apparel industry, 82 companies achieved year-on-year growth in net profit in the first three quarters of 2021, accounting for more than 70%. Among them, 36 companies doubled their net profits year-on-year during the reporting period.
The recovery after the epidemic has brought about an explosion of textile and clothing orders. However, due to issues such as shipping costs and exchange rates, lack of profits and lack of funds were still the situation of most textile companies last year. At the same time, the market situation has driven the enthusiasm of manufacturers for production. If the market outlook continues to improve, the market inventory will slowly decrease. If this wave of market conditions is only short-lived, it is likely to aggravate overcapacity this year.
Last year, more than 20,000 looms were added
Since 2017, with the strict inspection of environmental protection, a large number of loom households in Jiangsu and Zhejiang have moved to inland areas such as Anhui, Hubei, Hunan, and Jiangxi under pressure. Thanks to the preferential support policies of the local government, they have moved out. The number of looms has also doubled. After four years, has the launch of looms in 2021 returned to rationality?
In the post-epidemic era of 2021, export resistance in the clothing and home textile industries will still be relatively large. However, due to the severe overseas epidemic situation, some Southeast Asian orders have returned. Therefore, overall, China’s clothing and textile exports are still relatively optimistic. The domestic weaving industry also maintains a high-speed expansion mode. The total number of looms is expected to increase by more than 20,000 units in 2021, an increase of more than 30%, basically in line with expectations at the beginning of the year.
The domestic weaving industry also maintains a high-speed expansion mode. The total number of looms is expected to increase by more than 20,000 units in 2021, an increase of more than 30%, basically in line with expectations at the beginning of the year. Due to the impact of environmental protection, power rationing and other policies, the operating rate of chemical fiber weaving in Jiangsu and Zhejiang this year is close to 60%, which is basically the same as last year.
At present, the uncertainty of the order market in the new year and the slowdown of terminal digestion have also laid the “foreshadowing” for overcapacity in the later period! Of course, there is an 80/20 rule in every industry. Even if the industry is in a slump and most companies are not doing well, there will be some companies that are doing well in business. Generally speaking, the industry is not as pessimistic as everyone imagines, and it is normal to encounter problems at present. After all, the entire industry has experienced a round of rapid development since last year, and some companies will feel uncomfortable if the development speed slows down.
However, as these leading companies have successively relocated their weaving production capacity, a larger reshuffle in the weaving industry may occur next year! Some people may say that this is alarmism again, but generally speaking, large-scale reshuffles are caused by the entry of more powerful players in the market. It is just like a group of people with average martial arts fighting back and forth will not do anything, but suddenly a person comes. People who can kill with one move will usher in a big reshuffle at this time. For example, when all the major leaders come in to make textiles, the industry will naturally need to be reshuffled. At present, the major polyester leaders are all focusing on weaving. They are all giants in scale, and the cost of the industrial chain can be achieved to the extreme, and they can be put into large-scale production. Also next year.
Of course, there are many ways for an industry to develop. One is to develop toward scale, platform, and branding; the other is that there will be a large number of small, beautiful, and differentiated small businesses. Even if the cards are reshuffled, everyone will still have different living spaces.
The textile industry is undergoing a new round of baptism. In the general trend environment, it is difficult for most textile companies to escape the strong pressure of the industry downturn. In the upcoming oligarchic era, what is really left for small players? The market cake is only so big. If some people are too full, more people must be drinking from the northwest wind!
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