Guangdong: US Orders Loss Market Anticipation Pessimism

In September 6, 2019, China's cotton network correspondent visited the major textile and garment markets in Guangzhou to explore the current industrial status. From the survey, the downstream market is better than last month, but there is a clear gap compared with the peak season. As follows:

First, the wholesale market of clothing in Zhongshan, Guangzhou, was popular before, but now it is very crowded. This phenomenon is caused by the decline in demand resulting from the economic downturn, as well as the transformation of business models and government regulation and control.

Two, during the peak season, the printing and dyeing plants are stacked with warehouses and have a long list. However, at present, most of the research enterprises reflect that the printing and dyeing plant in Guangdong has less than 60% start-up rate.

Three, for the intermediate products such as colored yarn, colored cloth, shirt cloth and so on, during the peak season, there will be successive explosions according to the clothing styles and fabric needs. This year, traders and processing plants say that there are only one or two explosions at the stage, and some traders even say they do not see any explosion.

Four, the surveyed companies believe that the inventory of their respective industrial chains is very large, whether the import yarn of the port, or the stock of colored yarn, grey cloth and clothing are all at a high level in history.

The downstream is pessimistic about the market as a whole. The survey industry called the industry the worst year. At the same time, most believe that there will be no improvement in the trend. The reason is that the global economy is down and demand continues to decrease. In particular, the US manufacturing PMI set a new low, the long and short debt yield upside down, and the sharp appreciation of gold all showed strong investor risk aversion. Coupled with the Federal Reserve's rate cut, it shows its pessimistic expectations of the US economy. At the same time, the downward pressure on China's economy is bigger, and the rate of starting cotton yarn and grey cloth is less than 50% even in the traditional peak season.

In addition, trade friction between China and the United States has reduced us orders. In August 23, 2019, the United States decided to raise the original tariff rate of 10% in September 1st to 15%, which contained textile and clothing products. Research shows that some orders from the US have been transferred to Southeast Asia in the early days, and the existing US orders are also required to reduce the price of products, and the US orders are running away.