Global knitwear orders flood into Chinese knitting factories
Global knitwear orders flood into Chinese knitting factories
Recently, knitwear manufacturers have increased their knitting orders during the National Day holiday, and domestic cotton futures have shown a supplementary increase after the holiday, which is 1685 yuan/ton higher than before the holiday, an increase of 11.68%. As of 11:00 on October 15, the main cotton futures 2101 contract price broke through the key level of 14,400 yuan, and set a new high for the year. The spot market has also become hot, downstream orders are very hot, and yarns follow the rise.
The cotton price trend that has been silent for several years ushered in a sharp rise for the first time. Some market participants exclaimed whether the cotton bull market is coming? So, does this round of market have a certain degree of sustainability? Whether the sharp increase in cotton prices is related to the transfer of Indian knitting orders to China. On October 14, Li Xingqian, Director of the Foreign Trade Department of the Ministry of Commerce, responded to the transfer of Indian knitting orders to China at a media communication meeting.
Li Xingqian pointed out that China is the worldâ€™s largest producer and exporter of knitwear. It has obvious advantages in exporting labor-intensive products. Multinational companies adjust order production globally and international buyers choose knitwear manufacturers based on their production capacity. Normal market behavior. China took the lead in resuming work and production, which effectively guaranteed supply in the international market and supported the smooth operation of the international industrial chain and supply chain.
Overseas epidemic situation continues to worsen, knitting orders are transferred to China
According to foreign media reports, in recent months, many large-scale export-oriented knitting factories in India have been unable to guarantee normal delivery due to the epidemic. Many orders originally produced in India have been transferred to my country for production, including orders for towels and bed sheets. Larger. Since September, the overseas epidemic situation has remained severe. Knitwear manufacturers in India, Sri Lanka and other countries have been hit hard and delivery is difficult.
In view of the impact of the local epidemic, European and American retailers have transferred a number of orders originally produced in India to China to ensure continuous supply. Among the orders transferred from India to China, the orders for towels, bed sheets and other products are relatively large. According to the estimated data, the number of orders is now scheduled to May 2021. As the world's largest cotton producing country and the world's largest jute producing country, India's situation is less optimistic after entering the second quarter.
Data show that in 2019, the size of the Indian knitwear market reached 250 billion U.S. dollars (about 1.68 trillion yuan), and the knitting industry accounted for about 15% of India's total export revenue. As of 13:00 on October 14th, Beijing time, India has more than 7.24 million confirmed cases, and the cumulative number of confirmed cases ranks second in the world. With the continuous increase in the number of people infected with the new crown in India, the worsening of the epidemic has caused some knitting factories in the country to stop work, and layoffs will inevitably occur.
On the contrary, when the epidemic broke out in China at the beginning of this year, some Indian media thought that the epidemic could cause more foreign capital to flow into India to reduce dependence on Chinese knitwear and replace Chinese manufacturing. However, the reality is cruel. Indiaâ€™s wishful thinking has been completely overturned. Up to now, whether it is the knitting industry or infrastructure, Indiaâ€™s wishes have all failed.
"Due to the impact of the epidemic in the first half of the year, most of the production capacity was idle. After entering August, the knitting factory orders gradually increased. Especially during the National Day, not only had all the vacant work spaces been filled, but also increased staff shifts. As long as there is an order coming in, we can deliver to customers within the prescribed time." The head of a local knitwear manufacturer in Shaoxing said in an interview with a reporter from China Times.
Regarding the continuous increase in knitting orders, Lin Guofa, the research director of Breck Information, told the reporter of China Times that the demand for clothing orders for cotton after the festival has increased, and the demand for orders is still strong at present, the cotton transaction situation has been significantly enlarged, and the epidemic in India is uncertain. International traders shifted their orders to China, prompting the current demand for clothing and cotton knitting to explode. The strong expectation of "La Nina" has caused the market to worry about the cold winter in the northern hemisphere this year, stimulating clothing demand.
Institutions are optimistic about 4 stocks
According to data from the US Department of Agriculture, on the global front, global cotton production in 2020/2021 will be reduced, consumption and imports will increase, and ending stocks will fall. Global production has been reduced by 900,000 bales, with the reduction mainly coming from Mali, Pakistan and Greece. Global consumption increased by 1.5 million bales from the previous month, and the increase was mainly from China and India. Global cotton imports increased by 500,000 bales from the previous month, because Chinaâ€™s imports increased by 500,000 bales.
Lin Guofa said that only 5 trading days have been used since the holiday, and the cumulative increase in cotton has reached 1,345 yuan/ton. However, from a fundamental point of view, cotton has not shown significant benefits. Cotton in the northern hemisphere has been harvested one after another. This round of rise in cotton is partly due to low cotton prices in the past and lower cotton production in the United States. India may also be severely affected by the new crown epidemic this year. Reduce a certain amount of cotton production.
At the same time, from the perspective of cotton prices and planting income, the continuous low prices of cotton over the past two years have indeed affected the cotton planting process, and global cotton stocks have shown a downward trend. With the further increase of quantitative easing in the United States, the weakening of the US dollar, and the expectation of agricultural disasters, global agricultural products have generally risen. However, cotton continued to be under pressure in the previous period, and the current rise may rise to a greater extent.
In addition, driven by the increase in knitwear orders, on October 14, among 28 industries at Shenwan Grade I, the knitwear sector rose by 2.17%, the largest increase. The parent company Steady Medical of Cotton Era closed its daily limit less than half an hour after the opening, and the mask concept stocks Kute Intelligent and Blum Oriental both had their daily limit shortly after the opening. As of the close on October 14th, Cooltech (300840.SH) and Blum Oriental (601339.SH) have daily limit, while such companies as Jujie Microfiber (300819.SZ), Jinchun shares (300877.SZ), and Zhongwang Fabric ( 605003.SH), Xinye Knitting (002087.SZ), etc. also rose sharply, increasing by more than 9%, 8%, 6%, and 6% respectively.
According to data obtained by Alibaba International Station, since May, the number of orders from Chinese fabric and knitwear manufacturers has increased by more than 100%; the number of orders in the clothing industry has increased by more than 200% year-on-year, and the clothing industry has tripled in July growth of. Industry insiders believe that, stimulated by factors such as Double Festival, Double Eleven, and "cold winter" in October, as consumption continues to rise, the knitwear industry is expected to usher in the peak season.
The "turnover" of my country's knitwear industry is mainly in the second half of this year. Data show that from January to August, the national knitwear and apparel exports amounted to US$187.41 billion, an increase of 5.6% year-on-year, and the growth rate was 1.3 percentage points higher than that from January to July. In August, the national knitwear exports amounted to US$14.72 billion, a year-on-year increase of 47%; clothing exports amounted to US$16.21 billion, an increase of 3.2% year-on-year, realizing the first positive monthly growth this year.
Affected by the epidemic in the first half of the year, more than 80% of knitwear manufacturers' revenue declined, which seriously affected the industry's prosperity. According to data from the Ministry of Industry and Information Technology, in August, clothing exports increased by 3.23% year-on-year, which was the first time that the monthly positive growth had resumed after 7 months of negative growth during the year. In addition, the China Meteorological Administration stated on October 5 that it is expected to form a "La Nina" event this winter, which refers to the abnormally large-scale cold water in the equatorial central and eastern Pacific that has reached a certain level of intensity and duration. phenomenon. The extremely cold weather this winter has greatly stimulated the consumption of winter clothing.
Recently, the prices of upstream commodities such as cotton and chemical fiber have risen, which has driven the prices of yarn and other items to rise. In addition, fabrics have risen, dyeing factories have exploded, and large orders of millions of meters have frequently appeared in the market, mainly for winter clothing fabrics, such as bile cloth, nylon fabric, pongee fabric, T400, etc., and the production capacity of OEM factories The rate rose to 80%-95%. Some fabric merchants said: "This year our home textile product sales are more impressive than in previous years, mainly because the US market has more orders, which are mostly supplied to IKEA, Wal-Mart and other large supermarkets and sweater manufacturers."
Guosen Securities believes that the knitwear factory will usher in the third-quarter performance disclosure window in October, and is optimistic about the outstanding performance of high-quality leading companies in the context of the industry's monthly improvement. At the same time, looking forward to the fourth quarter, under the stimulus of October Double Festival, Double Eleven, "cold winter" and other factors, as consumption continues to heat up, it is expected to usher in the peak season. We are optimistic about knitwear manufacturers with potential for upward adjustments. It is recommended to pay attention to Semir apparel, Peacebird, Biyin Lefen, and Kairun.
At the same time, regarding the later trend of cotton futures, Lin Guofa said that cotton has been in low fluctuations in the early stage, mainly due to the continued low cotton prices that seriously affected cotton planting. The decline in cotton production in the United States and India this year led to a decline in global cotton production. Low cotton prices and declining production limit the room for cotton to fall, while sluggish demand suppresses the rise of cotton. With the explosive increase in clothing orders after the holiday, sweater manufacturers have changed the original supply and demand changes. The disk has risen by a breakthrough, and it has maintained a low point to do more. The goal is to look at 15,000 first, strictly implement the stop loss, and stop when the disk falls below 14,000.