Textile Industry in Difficulties Like 2008

—Analysis of the current textile market operation through China-Shengze silk chemical fiber index

According to the monitor of Chinese Department of Commerce-Shengze Silk Chemical Fiber Index, China-Shengze“50 indexes”continued to slow down in February, but the range of a price drop relaxed significantly compared to last month, which closed at 1043.07 points, fell 69.4 points compared to January. It was different from the“50 indexes”which went lower in February. As the leading index, the market confidence index began to bounce back before the“50 indexes”, the overall market confidence index was 116.63 points in February, an increase of 7.12 points compared with January.

See from the recent price index, as a whole, the total index of chemical fiber products was still in a weak consolidation stage in March. To be specific, the index of chemical fabrics rose slightly, but this was driven by the sales of twisting and high-density imitated silk products, while the price index of most other products were in a consolidation, which showed that the sales of conventional products were cold in the market. As we all know, the current inventories of the downstream weaving factory were between a month and a half and two months, and the shortage of individual manufacturers or even more than two months.

Since March, the index of chemical fiber raw materials has been presented the falling trends, which affected by the sluggish sales of the downstream fabric market. Meanwhile, because the sales of the weaving factory was on credit, while the purchase of raw materials need to pay cash, so it made many small and medium-sized weaving factory that the fund turnover was in trouble, and many enterprises had to shut down. At present, the operation rates of the main weaving areas generally dropped 20% or so, which caused the inventory pressure of the polyester factory has always been growing. Recently, the manufacturers started to price promotions in order to reduce the inventory. For example, the quotation of FDY50D/24F was 15,000 Yuan/ton by 6-month acceptance in early March, but now it has fallen to 14,000 Yuan/ton, and the range of a price drop was more in other small factory.

Judged from the current market situation, the slack season of fabric market will appear this year, the enterprise will face huge challenges, and many enterprises report that the difficulties of textile industry may even more than the financial crisis in 2008.

Other notable important information:

1、According to the issued statistics report of China Commercial Information Center (CNCIC) the retail sales of national hundred large-scale key retail enterprise presented negative growth year-on-year in February, which was -7.99%. Among them, apart from the non-comparable factors of the Spring Festival, the apparels goods retail sales of the national hundred large-scale key retail enterprises grew 6.1% year-on-year, and the growth fell 22.13% compared to the same period of last year, recorded at the lowest levels for nearly five years. Because of the Spring Festival was in advance, the consumption of New Year’s Day and the Spring Festival holiday has released early this year, the consumer demands were relatively rare in the first two months of this year.

2、according to the customs statistics, China’s export textile and garments were about 9.712 billion dollars in February 2012, which fell 7.01% year-on-year. Among which the export of textile yarns, fabric and finished products were 4.264 billion dollars, which an increase of 5.90% year-on-year and the export of clothing and accessories reached 5.448 billion dollars, which fell 15.10%. From January to February in 2012, the total export of textile and apparel arrived at 31.23 billion dollars, which a decrease of 2.59%.

3、The number of certificate of origin were 1552 copies last March in Shengze office of China Council for the Promotion of International Trade (CCPIT), but the number of certificate of origin were only 1062 copies in March 1st-22nd this year.