Foreign Trade Orders Are Closed Again By Multinational Enterprises!

Recently, the statistics of China's textile industry are not optimistic. Among them, the fabric output in the first half of the year was not expected to decline, with a decrease rate of 25.9%; the per capita clothing consumption expenditure was 611 yuan, down 16.4%, accounting for 6.3% of the per capita consumption expenditure; the capacity utilization rate of the textile industry was 70.3%, down 7.9%; the fixed assets investment of the textile industry decreased by 22.4%

The bleak state of the textile industry has begun to emerge since the outbreak of new crown pneumonia in overseas countries. The lack of overseas markets in the first half of the year has intensified the competition in the "cake Limited" domestic market, and various textile data are also extremely poor. But the pessimistic situation is far more than the surface of the data, or not just the first half of the year, the recent market risks still exist!

Port congestion caused by suspension and epidemic rebound

With the unsealing of European and North American societies and the increasing activity, ports in these regions are facing more and more traffic jams.

According to the latest covid-19 port barometer report released by the International Association of ports and harbours, the world's major container ports have to face more containers than ever before due to the impact of the tide of suspension.

Although shipping companies have cancelled a large number of voyages in the past few months, the pick-up in demand means higher utilization of ships on the voyage, resulting in a sudden peak of activity in the port.

It is reported that major container ports in Europe and North America have reported a significant increase in the average volume of ultra large container ships (ULCS) per call, with some hubs carrying up to 10000 TEU.

This makes the terminal and yard operations reach a peak, and begin to affect land operations, especially trucks entering and leaving the port. Some ports report that it will take days for the dock and its gates to return to normal, and the number of lost cargo is also on the rise.

The downturn in economic activity triggered by the new crown epidemic has exacerbated the global market turmoil and led to the contraction of Global trade. The International Monetary Fund said in June that international trade flows fell by about 3.5 per cent in the first quarter from a year earlier due to weak demand, the collapse of tourism and supply disruptions related to closures.

McKinsey's "global freight volume after covid-19: what's next?" The new outbreak is likely to hit the global logistics and trade industry for a longer time than any other recent crisis, according to the report.

According to the report, by the second and third quarters of 2020, global unrestricted trade demand may decline by as much as 13% to 22%. In contrast, the worst quarterly decline in trade volume during the global financial crisis of 2008 was about 5%.

Citing various scenarios, McKinsey said it would take 15 to 48 months for the volume to return to its level in the fourth quarter of 2019, and the value of the loss would be equivalent to 8% to 49% of the total trade volume in 2019.

"Lack of confidence in the market is still exist!

After all, customers will be expected to place an order three days ahead of schedule according to the customer's order.

According to related reports, as shoppers are still worried about the possibility of infection with the new coronavirus, retailers have to postpone purchasing and plan to sell the remaining basic clothing in spring in autumn. As a matter of fact, Laurent h and Nike are not willing to cancel some orders from American fashion giants such as Lauren h and Nike in the autumn!

Due to the special situation of the epidemic situation, the number of orders decreased by more than half compared with the previous years, and the large orders of several hundred thousand meters and several million meters are very rare. Therefore, the greater the risk of textile industry this year!

"We have a customer who ordered 500000 meters of composite silk with four sides of elastic sheet. We thought we had received a large order, but when the fabric was finished, the customer only took 100000 meters. The key is that the payment for goods was also half of the 100000 meters. If the customer didn't want to sell the remaining 400000 meters, we could only use it as stock. We didn't want to throw away the gray cloth at a low price It's too bad to go out! " A textile boss in Shengze said helplessly.

The abnormal congestion of ports and the "break of appointment" of orders from time to time are not only the intuitive feedback of the poor current and past textile market, but also a serious blow to the market confidence in the future textile market. The whole textile industry is more difficult to face the future changeable market.

Overstocked inventory is difficult to sell, and the future is still fierce competition

"The cold market situation in the first half of the year has not yet been able to digest all kinds of overstocked inventory and cancelled orders, and the cruel market competition in the second half of the year has begun", which almost all textile workers need to face.

In the first quarter and the second quarter of 2020, we think that the impact of the first quarter and the second quarter of the International Textile Association on textile enterprises will reach the level of 21% and 21% respectively.

Even with the most optimistic estimation and the time of stock preparation in advance, such a weak market will last at least three months. In the time before the market gets better, the extent to which the inventory will increase and whether the capital chain can be maintained has become a huge challenge for textile enterprises.