Sudden! On the evening of August 2, something happened that no one wanted to see. The impact of geopolitical factors on market trade increased sharply. This is mainly reflected in rising concerns and falling market risk appetite.
What impact does geopolitics have on textile companies?
Oil prices have reached a sensitive time
The rising geopolitical factors ultimately had a huge impact on market sentiment. Crude oil, an important strategic material, responded most acutely to this. After the Russia-Ukraine war started half a year ago, Brent oil futures once exceeded the $100 mark, setting a new high since September 2014.
The crude oil market has risen sharply, and the polyester and polyester markets must follow suit! Because crude oil is one of the most important raw materials in the polyester and polyester industry, the rise and fall of oil prices will directly affect the overall profitability of the polyester and polyester industry. And this momentum has continued to this day, with oil prices overall still at high levels.
The supply of special raw materials is blocked
Textile enterprises are now in an era of involution. The production capacity of various conventional products has overflowed to an unstoppable level. Textiles are suffering from price wars. Weaving inventories in Jiangsu and Zhejiang have been rising. According to data from Silk City, the weaving inventories have been monitored. Arrived 37 days. It can be seen from the trend chart that this year’s weaving inventory has far exceeded previous years.
Therefore, many textile people have turned to special functional fabrics, such as fabrics made with functional raw materials (such as graphene). There are many companies producing special functional raw materials across the Taiwan Strait. If friction escalates, it will be very important. Maybe these raw materials can no longer be used, and textile companies need to find new suppliers. But everyone knows that different manufacturers produce the same raw material products. Since each factory has different internal reference indicators, the products will be more or less different. , especially for this kind of customized functional fabrics, there may still be some running-in process when looking for a new manufacturer.
Foreign trade will be affected again
Affected by this geopolitical factor, foreign traders are mainly affected by two aspects:
First of all, there have been reports some time ago that the tariffs imposed by China and the United States are expected to be lifted soon. This is undoubtedly great news for foreign trade companies. However, the direction of the wind may change again. Due to geographical factors, Sino-US relations may face another challenge. The tense situation, the trade war that has been expected to cool down before, may heat up again. What is certain is that because of the old witch’s insistence, it is inevitable for us to impose tariffs on the United States, and at the same time, the United States will counterattack with the same means. .
An old textile master said: “In the end, the additional tariffs will not increase the cost, but directly reduce the trade export volume.”
Another foreign trade boss told the editor: “There is currently no impact on their European orders. It will mainly be affected by China and the United States.”
Secondly, since many foreign traders currently export through the other side of the country, this part of the trade may disappear. This part of the foreign traders may choose other places to export, which will have no impact on the placement of orders. However, due to the incident Suddenly, many foreign traders have not had time to react, so there will be a short-term impact.
In short, this incident is mostly a game at the political level. For textile people, how to receive orders is more important. It stirred up waves with one stone. No matter where the Sino-US trade relations go next, the Chinese textile industry has gone through Development has matured over the past few decades. Although the industry is under pressure, it is not hopeless. Perhaps textile people can take advantage of this special moment to concentrate on managing their own customers, retain high-quality customers, and develop potential customers!
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