In the past “Double 11”, many manufacturing companies worked overtime at full capacity, but this may be the last good day of the year. The foreign “Christmas shopping season” that once had high hopes may not be as hot as in previous years this year.
The Christmas sales season is ahead of schedule, and foreign customers are rushing to buy goods
Yiwu manufacturers are not happy: the goods are ready, but they cannot be shipped out
Christmas around the world may not be possible without Made in Yiwu (Yiwu) manufacture).
In the global Christmas supplies market, the Christmas supplies area of Zhejiang Yiwu International Trade City brings together hundreds of Christmas supplies merchants. Two-thirds of the world’s Christmas supplies come from here. Yiwu can be called the world’s largest “Christmas supplies factory.”
In response to the shipment situation of Yiwu’s Christmas supplies industry this year, on August 23, comprehensive interviews with various parties learned that since the third and fourth quarters after the epidemic last year, there have been continuous increases in sea freight rates. It has doubled, positions are in short supply, a box is hard to find, and it has not fallen back.
With the continued impact of the overseas epidemic and the shortage of global shipping capacity, the supply rhythm has also been disrupted. According to manufacturers in Yiwu, the supply and demand of the foreign trade business of Christmas supplies this year is out of balance and shipments are delayed. “This year’s shipment situation is quite special. At this point in time, Yiwu Christmas supplies manufacturers are seizing the time to produce at full capacity; judging from the order volume reported this year, although it has returned to 70% of the situation before the epidemic, but The final shipment volume has yet to be determined. Due to port closures and maritime congestion caused by the epidemic, manufacturers will be more conservative in shipping. At present, it is still impossible to judge how much we will ship in the end.” Christmas supplies in Yiwu City, Zhejiang Province Cai Qinliang, secretary-general of the industry association, told reporters.
Due to global freight backlogs, congestion, rising freight rates and other issues, many buyers may return empty-handed this Christmas shopping season. For manufacturers who have been operating in Yiwu for more than 10 years, the “tangle” they are talking about this year refers to exactly that: under the pressure of “increasing freight, rising raw materials, and labor”, profits have been far worse than before, and profits have been further reduced. In this kind of situation, Under such circumstances, companies have no choice but to “rather do nothing or do less” and maintain operations in a conservative manner. “The order came early. Now the goods are ready, but they can’t be shipped out. The feedback from the freight forwarding company is that there are no boxes. We also have to keep in touch with the freight forwarding company at the port every day, so that we can know the quotation in real time. situation, on the one hand, to understand the current degree of terminal congestion and tight capacity.” Luo Youdong said. “Starting from June this year to October this year, this is our shipping period. Each time I ship, I will take 1 to 10 shipping containers, but this year’s goods, if I want to ship out all, I have to Big loss.”
Currently, Christmas foreign traders are trying their best to digest the pressure of declining profits, rising raw materials and labor costs caused by the epidemic. The biggest uncertainty behind this is sea freight. The epidemic has affected the efficiency of container transshipment, with shipping capacity declining sharply and freight rising sharply. Freight is currently the biggest constraint on my country’s export growth. Although prices have risen, my country’s container throughput from January to June this year still increased by 15% year-on-year, and the cumulative increase compared with the same period in 2019 was 8.8%. Sea freight may reduce my country’s external demand to a certain extent.
The outbreak of production capacity and mutated viruses may continue to affect the market
At present, the supply and demand situation of both polyester and weaving cannot be said to be very optimistic, or may not be as good as expected. The demand for polyester is expected to be better than the demand for weaving. At the same time, Inventories in the polyester-weaving segment will still show a downward trend in the second half of the year.
First of all, there will be more new weaving and texturing equipment in 2021. This is mainly due to the weaving and texturing links in 2020. Due to the relatively considerable profit benefits due to raw material price differences and terminal stockpiling, profit induction and the recovery of macro expectations, investment in weaving and texturing equipment is likely to reach its peak in 2021. In the first half of the year, the launch of loom texturing machines was concentrated on 4/5 In July and August, the second half of the year is concentrated in July/August. The launch of a large number of new equipment also provides immediate growth space for the demand for polyester and polyester. At the same time, the production capacity concentration and bargaining power of the polyester link are much higher than that of the weaving and texturing link. At that time, the polyester link can rely on the advantages of high concentration to promote downstream purchases through joint quotations, output control, promotions, etc., thus reducing inventory. transfer.
Furthermore, looking back at the second half of last year, among which the gathering in September/10/November last year The demand for ester and weaving has recovered significantly. Many weaving links are in short supply and are producing at full capacity. At the same time, the production and sales of polyester and polyester continue to be booming. The reason is that in addition to the real rebound in terminal orders due to e-commerce peak seasons such as “Double Eleven” and “Double Twelve”, another important reason is that last year’s weaving and texturing factories had great uncertainties about the second half of the year and were prepared for low operating conditions. It is not sufficient, so the market supply is temporarily in short supply due to the sudden attack of terminal orders. This year, the same logic has been reversed. In anticipation of demand recovery in the second half of the year, weaving and texturing factories have tried their best to maintain a high operating capacity even though domestic and foreign trade demand was sluggish in the second quarter.Due to the high demand, high production and high gray fabric inventories are used to prepare for the demand that may pick up in the second half of the year with the most sufficient supply. Even if the terminal orders are placed as scheduled, sufficient supply preparations may cause the market to transition to the end of the peak season with relatively unpopular feedback.
Another difference from last year is that the production and supply of various domestic industries have basically returned to normal this year. Last year, the situation where terminals were worried about supply shortages and thus concentrated on hoarding goods will no longer exist in recent years. At the same time, The price of raw material polyester and polyester has rebounded strongly this year, and there is no bargain hunting at the terminal. The pace of demand procurement in the weaving process has slowed down significantly compared with last year, or it has become more rational and calm. Finally, if the overseas epidemic recovers next, due to the labor cost dividends in Southeast Asia and other regions, textile and apparel orders that had previously returned to China for a short period of time will return to Southeast Asia.
In summary, the market still has expectations for the next traditional peak season. However, due to the high start-up and inventory of weaving As the situation enters September, sufficient supply VS peak season orders are picking up, and orders from overseas epidemic recovery are returning to Southeast Asia. By then, the profit efficiency and inventory of the polyester-weaving link may be difficult to replicate the optimistic situation in the fourth quarter of last year. </p
