The Shanghai Shipping Exchange released a weekly report on the export container shipping market on the 18th. China’s export container shipping market is still gradually recovering after the Spring Festival holiday. Although cargo volume maintained positive growth this week, the market is still in a state of oversupply. Freight rates on many ocean routes have declined, and the composite index has fallen.
Sea freight fell and foreign trade orders increased
Since the overseas epidemic has eased, high shipping costs have begun to fall. The rise and fall in shipping prices has also directly affected the costs of many foreign trade companies, and at the same time promoted the export volume of clothing. The person in charge of a foreign trade company exporting to Southeast Asia reported that in the first two months of this year alone, there was a visible slight decrease in freight costs. “We mainly export to Bangladesh and Vietnam routes. Compared with a year ago, the freight rates for high and small containers on these routes have dropped, by about 300-400 yuan.”
At present, the situation of foreign trade orders in the textile market is also improving. Most companies have said that the order situation has improved compared with a year ago. Especially recently, imitation silk fabrics have been selling well in the market. Most of them are export orders. . In general, orders for foreign trade brands are just being processed, and new orders are being placed one after another.
In terms of products, imitation silk, four-way elastic, nylon and other fabrics are relatively popular nowadays, many of which have many foreign trade orders, and the quantity is larger than domestic sales orders. In terms of operating rate, due to the increase in orders, factory production enthusiasm has increased, and the operating rate has rapidly increased to 63.5%. In terms of dyeing factories, some dyeing factories have already been out of stock, and some factories can also reach 60-70%. It takes about 10 days for gray fabrics to be shipped from warehouse to shipment.
Falling freight rates will boost exports
Although the foreign trade situation has improved now, there is still a gap compared with the same period in previous years. The current situation can only be said to have begun to pick up after the epidemic was relaxed. The decline in sea freight will be more conducive to the recovery of foreign trade orders. Declining sea freight rates and the relaxation of the epidemic are all beneficial to my country’s exports, and orders flowing to Southeast Asia are slowly returning.
According to China Customs statistics, from January to December, my country’s total clothing exports reached US$175.4 billion, a year-on-year increase of 3.2%. It fully reflects that since the outbreak of the epidemic, despite the impact of the global supply chain and the imbalance of market supply and demand, my country’s textile and apparel has still been able to break through the constraints and grow in difficulties, which is indeed a strong competitiveness.
At present, overseas supply chains are unable to pose a fundamental challenge to China in the short term, no matter in terms of production capacity scale, product structure or industrial chain integrity. Its products are highly concentrated in end-consumer products such as clothing and home textiles, and it still needs a process to reach or surpass China in terms of scale or structure. Neighboring countries are highly dependent on Chinese textile raw materials, especially chemical fiber products. More than 60% of textile raw materials in Vietnam, Bangladesh and other countries are imported from China. Therefore, at present, my country still has high competitiveness, and enterprises need to take advantage of the RCEP opportunities to rationally layout industries and trade to enhance their competitiveness.
However, in 2023, some internal adjustments in the domestic textile industry may also affect the receipt of foreign trade orders. The transfer of water-jet looms from Jiangsu and Zhejiang regions to the central and western regions is a general trend and a breakthrough for enterprise transformation and upgrading, but it will also bring certain fluctuations to the market. For example, some factories in the Jiangsu and Zhejiang regions were originally unwilling to relocate to the periphery and are likely to transform into trade. Whether it is domestic sales or foreign trade, companies with more production capacity will compete. For another example, if the original factories in Jiangsu and Zhejiang are moved to the periphery, the number of water-jet looms will increase exponentially, and the oversupply situation will further worsen.
The foreign trade market is rebounding rapidly with the recovery of overseas economies, especially the autumn and winter markets in the second half of the year, and textile people will benefit from it. However, in the market, we must also be cautious that various costs such as raw materials, dyeing fees, and exchange rates will increase due to this situation, and be careful to reserve space when quoting in advance.
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