How Long Can The Order Boom In The Domestic Market Of The Textile Industry Last?

Since this year, the rapid growth of China's textile industry has surprised many enterprises. In particular, the overall recovery of orders in the cotton textile industry has quickly driven the sales of complete sets of cotton textile equipment that was once affected most seriously by the financial crisis. Many cotton textile equipment manufacturing enterprises have been unable to make orders, and even a rare situation of demand exceeding supply has emerged in recent years. It is understood that most textile machinery enterprises have been fully booked in the first half of the year, and some have been booked in the third quarter.

　　 The order recovery is not entirely from the market

After the market downturn in 2008 and 2009, it was a good thing that the industry economy was showing signs of improvement. But when it was inconclusive whether the impact of the financial crisis on the real economy had bottomed out, China's textile industry took the lead in picking up sharply, which made many industry insiders unavoidably worried, and even some pessimists analyzed that, This hot sales situation is difficult to maintain until the end of the year, and the whole industry may show a situation of high opening and low moving.

Gao Yong, Vice President of the China Textile Industry Association, believed that the booming sales of cotton yarn and cotton cloth this year had market demand factors, but not all of them came from market demand, but the factors of replenishing inventory and speculation accounted for a larger proportion. First, from the perspective of export markets, the European and American markets have not recovered so quickly, so it is obvious that they are to replenish inventory; Second, it is predicted that cotton production will be reduced this year. In addition, India will ban cotton exports, so many enterprises will rush to buy cotton, which will promote cotton yarn production; Third, the price of cotton raw materials has risen rapidly this year, which has led some investors who originally invested in real estate and coal mines to invest in cotton and cotton yarn; Fourth, based on the expected appreciation of RMB and the expected growth of raw material prices, textile enterprises desperately hoard raw materials as soon as they have funds. Driven by the above four demand factors, the textile machinery and equipment have been in hot sales since this year.

　 Equipment enterprises worry about whether funds can be withdrawn

So, how long can this hot sales situation last? According to the analysis of insiders, only after the demand for replenishing inventory and speculative inventory are eliminated can the market demand increase. In other words, if the textile industry replenishes inventory to a certain level, the expectation of raw material inflation has been released, and the RMB has begun to appreciate, then a normal and real market demand will be reflected. Most people believe that the current rapid growth momentum of the cotton textile industry is likely to not continue in the second half of the year.

In the interview, the reporter found that many heads of cotton textile equipment manufacturing enterprises were not completely happy about the number of orders they received at once, but had many worries. For example, some enterprises worry that a large number of orders will lead to a decline in product quality; Some enterprises worry about whether the orders they have taken can be picked up on schedule. In an interview with a reporter, a person in charge of an enterprise said that a large number of orders not only made the OEMs unable to do so, but also caused great pressure on the sub suppliers of spare parts. Due to the impact of the financial crisis, most sub suppliers do not have much inventory, and major parts such as castings are robbed as soon as they go offline. As we rush to deliver, it is inevitable to ignore the quality. Whether the funds can be withdrawn in time is a risk that textile machinery enterprises must face. At present, the advance payment for orders of textile machinery and equipment is very small. Once the situation changes in the second half of the year, textile enterprises have sharply reduced orders and are in financial difficulties. Whether they can pick up goods on time will be a big question mark.

　 In line with the industrial policy, the equipment sells well

In fact, the reason why cotton textile equipment manufacturers are worried about the orders they have received is not only related to the four factors analyzed above, but also closely related to the total amount of oversupply in China's cotton textile industry. It is precisely for this reason that in recent years, once the cotton textile market is slightly disturbed, it will immediately touch the nerve of cotton textile equipment manufacturers. In 2008 and the first half of 2009, when the financial crisis had the most serious impact on the industry, the sales of cotton spinning equipment in China almost dropped by 50% compared with the past. This year, even ordinary spinning frames were sold very hot. This is indeed a worrying signal.

Compared with cotton spinning equipment, which is completely dependent on the face of the market and changes in the environment, those textile machinery equipment that conform to the national industrial development policy, meet the needs of the textile industry for small batch, multi variety, deep processing and high-grade, and have the advantages of efficiency, energy saving and labor reduction, not only sold very well last year, but also performed more prominently in the face of the market that continues to improve this year. For example, air jet looms, computerized flat knitting machines and printing and dyeing equipment with energy saving and emission reduction effects that can improve product grade and production efficiency still maintain a strong sales situation this year, while manufacturers are full of confidence in the market in the second half of the year and the next three or four years. On the one hand, these equipment meet the needs of technological transformation, structural adjustment and industrial upgrading of enterprises, as well as the needs of national industrial policies; On the other hand, there is still a large market space. For example, computerized flat knitting machines, at present, there are about 1.6 million hand flat knitting machines in China, while there are only about 100000 computerized flat knitting machines. It is an inevitable trend for the industry to replace manual flat knitting machines with computerized flat knitting machines. Therefore, the demand for computerized flat knitting machines in the domestic market has just begun, and the growth trend of the computerized flat knitting machine market will not be shaken within five years. Another example is printing and dyeing equipment. The national requirements for mandatory indicators of energy conservation and emission reduction are becoming more and more stringent. The "Conditions for Access to the Printing and Dyeing Industry" (2010 Revision), implemented since June 1, undoubtedly raises the entry threshold for printing and dyeing enterprises, which forces some textile printing and dyeing enterprises to eliminate old, non energy saving models and replace them with new ones with more significant energy saving effects. Therefore, the industry generally believes that printing and dyeing equipment will maintain a stable growth trend for a long period of time in the future. {page_break}

　 Chinese Market Calls for High grade Equipment

Therefore, judging from all aspects, the booming sales situation of cotton spinning equipment, especially low-end cotton spinning equipment, is only temporary and will not last for too long.

Due to the impact of the financial crisis, the business volume of several major European textile machinery enterprises such as Oerlikon, Rieter, Picaro and Toyota in Japan decreased in 2009, and there were losses to varying degrees. However, the situation of these textile machinery enterprises in China is quite different from that in the global market. Truzler's cleaning unit, drawing frame and carding machine sold very well in the Chinese market in 2009, as did other major companies. In 2009, Picaro sold 1400 rapier looms in the Chinese market, and Japan Toyota only sold thousands of jet looms to Lanxi City, Zhejiang Province. The orders of Ouruikang's chemical fiber civil silk equipment in China have been arranged to the second half of this year, and the sales of Lixin Machinery in China in 2009 have basically returned to the level before the financial crisis. This shows that no matter how the financial environment and market situation change, it will not fundamentally change the demand of domestic users for high-end equipment. In the first four months of 2010, China imported $1.149 billion of textile machinery, up 80.22% year on year. In fact, since 2005, China's textile enterprises' demand for equipment has shown significant changes. This change is mainly reflected in the hot sale of domestic high-end equipment and the re warming of imported equipment. In 2008 and 2009, although imports declined due to the impact of the general environment, the demand pattern for equipment has not changed much.

After the financial crisis, the trend of structural adjustment of China's textile industry has become more clear. Those models with high degree of automation that can save labor and improve the quality of textile products will receive more and more attention from users. Therefore, China's textile machinery market, especially the high-end equipment market, still has great development space and demand potential, which is the real reason why ITMA ASIA cooperated with China International Textile Machinery Exhibition and settled in China. Faced with such a huge market, who can turn a blind eye to it, and who can give up the chance to get a share?