Textile market is facing big test

Editor's note: The textile and apparel export data and PPI index released by relevant agencies in January and August have both declined. The advancement of the textile industry has become increasingly difficult. Experts believe that the textile industry will remain in a period of consolidation and turmoil during the first half of this year.

The textile and apparel export data and PPI index issued by the relevant agencies in January and August have both declined. The textile industry's advancement has become increasingly difficult. Experts believe that the textile industry will remain in a period of consolidation and turmoil during the first half of this year.

The January and August textile and garment export data and PPI index issued by the relevant agencies have both declined. In the spring season, the advancement of the textile industry has become increasingly difficult.

Customs statistics show that in January 2012, textiles and apparel exports were US$ 21.52 billion, a decrease of 0.5%. Among them, textile exports reached US$7.68 billion, a decrease of 6.8%; apparel exports reached US$13.84 billion, an increase of 3.5%.

On February 9, the National Bureau of Statistics released data showing that the ex-factory price (PPI) of industrial products rose by 0.7% year-on-year, a decrease of 0.1% from the previous month. The purchase price of industrial producers rose by 2.0% year-on-year, a decrease of 0.3% from the previous quarter.

Experts interviewed pointed out that the pressure on the textile industry since 2011 has been escalating, and the market outlook has also been pessimistic.

Weak data reflects the plight of the textile industry Xie Fangming, director of the Ministry of Industry of the China Textile Information Center, said in an interview with this reporter that the decline in export data in January was mainly due to the Spring Festival holiday, but the overall situation is still not optimistic. "While removing the factors of price increase, the actual increase shrinks even more."

According to the data, the PPI rose only 0.7% year-on-year, a rise of 26 months. The weakness of PPI data means that domestic industrial producers will continue to face pressure in the near future.

Since the middle of 2011, the manufacturing industry has undergone abrupt changes and the industry has suffered almost a fatal blow, especially in the textile industry. In the export-oriented textile industry, due to the impact of the international economic crisis, exports have been severely declining, and the cost of domestic labor has gradually increased. The textile industry, especially the industries with relatively low technological content, such as shoes, hats and toys, have been gradually transferred to emerging markets such as Southeast Asia and Eastern Europe (such as Bulgaria and Poland) and the advantages of China’s labor force have been impacted. "But China Textile is not losing all its advantages. Because its industrial chain is complete, the quality of workers is high, and its equipment is excellent, it is still attractive to foreign customers," said Xie Fangming.

According to media reports, more than 30% of textile and apparel companies in Jiangsu and Zhejiang closed down in 2011. The tide of closure of the domestic textile and garment market in Guangzhou, Dongguan and Wenzhou is even more serious. Xie Fangming pointed out that the trend of “polarization” has become increasingly prominent. “Some large companies have already received orders for this year in June. For some small businesses, they face the test of life and death.”

Xie Fangming also pointed out that on the domestic front, the problem of recruitment difficulties for companies continued in 2012. Due to low orders and labor shortages, the current operating rate of enterprises is also very low. The weak growth in textile and apparel retail sales may be dragged down by a larger base. Taking into account the “Twelfth Five-Year” policy of promoting consumption and expanding domestic demand, the domestic market remains positive.

Internationally, “The export of Europe continues to chr(34) and defeats Chrysler(34). Because of the relatively long production cycle of textiles and clothing, this trend may extend into 2013.” In the European Union, except for the UK, the situation is slightly better. The situation in other countries is very serious. Xie Fangming said that at the recent exhibitions of the French exhibition "TXETWORLD" (French Fabrics International) and the "PV" (Paris's first visual fabrics exhibition), the number of exhibitors was significantly reduced, reflecting the downturn of the global textile industry. "However, the slightest solace is that the US market is slightly warming up," he added.

The pressure on the textile industry remained the same in 2011, with total textile and apparel exports worth 247.89 billion U.S. dollars, a record high, and the year-to-date exports still achieved a 20% increase. This year, whether China's textile and apparel exports can maintain this growth rate? Xie Fangming believes that the number of variables in 2012 is quite large, and the export situation remains difficult.

The Baltic Shipping Price Index (BCI) published by the Business Club in January showed that the domestic bulk market is still in a weak state. As far as the textile sector is concerned, the consumer market is weak, the economic market is helpless, and the industry’s recent pressure remains.

From the point of view of key textile raw material products, regardless of the lint market or the PTA market, the signs of strong recovery in the first half of this year were weak.

An analyst believes that from the perspective of downstream industry performance, the domestic and international market demand continues to be sluggish, and the supply and demand side is still in a mode of supply easing, thus it can be predicted that this year's cotton market is still not optimistic.

PTA analyst Xia Ting also predicted that in 2012 Asian PTA producers will face the pressure of overcapacity, while the demand for terminal textile market is still not optimistic, and imbalance between supply and demand will dominate the PTA market. PTA is the main raw material for the production of polyester, and polyester is currently the most widely used synthetic fiber, accounting for more than 60% of the world's synthetic fiber production. China's polyester accounts for 60% of world production.

According to price monitoring, the domestic PTA spot price (East China market) began to fluctuate and decline from February, and the current price is 8,950 yuan/ton, which is a decrease of about 2.19% compared with 9,150 yuan/ton in early February. The main reason why PTA prices are difficult to maintain at a high level is the lack of demand. The downstream polyester market was lightly traded and stocks increased. Most factories increased their incentives to stimulate sales. Xia Ting believes that the demand factor will still dominate the PTA trend in the short term.

Although there was a slight increase in the textile raw materials market in January, the downstream market fees were still deplorable, and in the raw material market, the transactions were unusually deserted. Even during the year, there was no golden period for the industry. In 2011, the increase in apparel prices has been a hot topic, but there has also been a strange increase in the clothing industry, with a sharp decline in both consumer and export volume, and a serious inventory, which has caused a fatal blow to the entire industry.

Xia Ting believes that from the perspective of the above two important raw materials for the textile market, the textile industry will remain in a period of consolidation and turmoil during the first half of this year.

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