China Apparel & Textile Blog

The anticipated further rebound in trade surplus in the second half, coupled with other forms of capital inflows, points to continued upward pressure on the yuan.

China’s import growth came in lower than expected at 19.3 percent year-on-year (YoY) in June, compared with the upside surprise of 28.4 percent posted in May.

Meanwhile export growth moderated to 17.9 percent from 19.4 percent in May. As a result, the trade surplus widened to $22.3 billion in June, the highest in seven months, according to data released by the Customs Administration on Sunday.

The slowdown in June trade growth reflects slowing sequential momentum and a high year-earlier comparison – both for exports and imports. This is not surprising, as the recent decline in the PMI export orders and import indexes pointed to weaker external and domestic demand.

Taking into account the rise in import and export prices, the real import growth should have slumped to around 2 percent year-on-year (YoY) in June from 10 percent in May, and the export growth should have fallen to around 7 percent from 9 percent in May.

In particular, import volumes of most major commodities fell in June, while YoY import price growth remains elevated by our estimates. Crude oil declined 11.5 percent compared with an increase of 20.8 percent in May, steel products were down 18.4 percent versus a decline of 5.9 percent in May, and copper imports fell 14.7 percent versus a drop of 35.8 percent, and aluminum imports fell 13.5 percent versus a decline of 20.8 percent.

The trade surplus stood at $44.9 billion in the first half of 2011, down 18.2 percent from a year ago. It is worth noting that the surplus from processing trade surged to $164 billion in the first half, three times that of the overall trade surplus, and up 19.8 percent YoY.

Barclays maintains its forecast of full-year export growth of around 20 percent and full-year import growth of 23 percent. An expected stabilization in export growth, combined with slowing import growth, suggests a further rebound in the trade surplus in the second half to $130 billion. This, together with other forms of capital inflows, points to continued upward pressure on the yuan against the US dollar in the second half.

Despite challenges from rising labor costs, yuan appreciation and tight credit conditions, the contribution to total trade by small and medium-sized private enterprises (SMEs) increased in the first half, outperforming SOEs and foreign-invested enterprises.

Total imports and exports by SMEs accounted for 27 percent of the nation’s total in the first half, and the sector’s growth of 38.8 percent exceeded the 25.8 percent growth for the country’s overall trade. Also, exports of labor-intensive sectors continued to grow at a relatively fast pace – eg, textile products rose 29 percent, clothing increased 24 percent, and suitcases were up 39.2 percent.

These figures were in line with some anecdotal evidence, which suggested that many SMEs/exporters have managed to survive the challenging environment, thanks to their relatively smaller scale and flexible business models. These figures may help alleviate concerns over the “closure of factories and surge in unemployment”, and hence, are supportive of further gradual yuan appreciation.

The author is vice-president and China economist at Barclays Capital Asia Ltd. The opinions expressed here are entirely her own.

Source: CNTEX

The customs general administration released figures showing, this year 1-in May, China’s textile and apparel exports total 88.835 billion us dollars, up 26.55%. From the sales amount look, textile and apparel exports appeared some atrophy symptom. From the month of may, textile and apparel exports 20.338 billion us dollars, up 23.77%, the rate of growth of 33.53% compared to the same period last year, a drop of 9.76% in the first four months rate slowed sharply. Annulus comparing data to see from in May, textile and apparel exports $20.338 billion, a month-on-month rose by only 2.33% in April. In addition to export situation is not optimistic, and the domestic consumption is not temperature is not fire and textile clothing industry facing huge pressure, small and medium-sized enterprise effects of restricting output production phenomenon also is very common.

HONG KONG – Homegrown Chinese sport brand Li Ning Co Ltd said it expected to see its revenues decline 5 percent in the first half of 2011 from a year ago as it moves to revamp distribution channels.

In a filing to the Hong Kong bourse on Thursday, it said same-store sales growth maintained a low single-digit pace from January to June, with the total number of Li-Ning brand stores at 8,163. It did not give comparison figures.

Li Ning said its gross profit margin was expected to decline by 1 percentage point due to a new wholesale discount policy and increases in raw material costs.

Profit margin attributable to shareholders is expected to decline to 6-7 percent in the first half from 12.9 percent a year ago, it said.

Due to expected significant increases in raw material costs in the second half of 2011, Li Ning forecast gross profit margin for the period would decrease from last year.

Profit margin attributable to shareholders for the full year 2011 is expected to decline by about 1-2 percentage points compared with the first half, it added.

Li Ning also said order value for the fourth quarter of 2011 rose more than 5 percent year on year, though order volumes declined at a high single-digit rate. Average retail prices for apparel and footwear products increased over 10 percent.

Shares of Li Ning are down 16.9 percent so far this year, against a 2.2 percent fall in the benchmark Hang Seng Index.

Source:China Daily

According to the latest statistics released by China´s National Bureau of Statistics, the CPI in May rose 5.5 percent year-on-year, which hit the record high level over the past 34 months.

Day by day, the adverse influence of inflation to China textile industry is emerging. Many textile mills believed that the current situation is even worse than the year 2008 when the economic meltdown began. International market demand waned suddenly in 2008 causing severe orders plunge. Contemporary situation is quite the opposite, orders are not that inadequate, but the inflation has to a large extent cornered the profit margin. Get the orders and satisfy the customers, then deficit is inevitable, for a great number of companies. Impacted recently by China´s frequent natural disasters, inflationary expectations ascended against all the policies issued by the government. Presumably, many believed that the situation won´t see a radical change in a short period of time.

The continuous appreciation of RMB to US dollar puts extra burdens to many textile mills. Expected appreciation of RMB has noticeably shortened the trade cycle and put potential risks to trade business with offshore companies. Currently, only a very limited number of raw materials imported could benefit from the RMB appreciation. For most of the small-and-medium-sized enterprises, inflation and the appreciation of RMB bring forward two adversities for China textile industry: inflation encroaches on the profit margin and the RMB appreciation lowers down the competitive edge of domestic products.

Many professionals believed that the aforementioned two disadvantageous factors won´t fade out soon this year. On the contrary, there is high possibility that the situation could exacerbate leaving textile companies no alternative but pacing up the adjustment.

Source:China Textile Leader

Textile industry is a very long industry chain, with vertical industry chain system, and each link chain closely linked. But industry chain end has different characteristics, different present upstream, downstream slow cycle quickly market characteristics. Textile clothing industry chain operation mode of each end is not the same as the specific needs, not the same. But, as the entire industry, because linked together, the core values and overall operation rule is consistent, this is from the scale economy industry should value to the economic transformation. This is June 28, 2011 in Beijing by Chinese textile clothing industry social responsibility at the annual meeting of the association of China’s textile industry will ChangSunRuiZhe a advocate of the industry.

STOCKHOLM – Swedish textile firm OrganoClick has developed two new fabric finishing treatments that the company hopes will help reduce the amount of environmentally harmful and toxic chemicals used in the textile industry.

The two products are OrganoTex; a modification technology based on biodegradable constituents conferring highly water repellent properties to cellulose-based textiles (e.g. cotton, linen, and viscose) and OC-biobinder; a biopolymer-based binder used for improving mechanical properties to nonwoven and coated textiles.

The water repellent properties of OrganoTex are said to mimic natural processes occurring in plants, thereby allowing a process entirely free of substances such as fluorocarbons, isocyanates and formaldehyde, known to have either severe effect on aquatic eco-systems or being highly toxic.

The OrganoTex modification technology has been designed to enable cellulosic fibres to covalently bind to a unique bio-additive, developed by OrganoClick AB. The bio-additive is biodegradable and still confers excellent and durable water repellent properties to textile products during their normal lifetime.

OC-biobinder is a new binding system used for improving certain mechanical properties, such as stiffness or strength, to cellulose-based nonwoven or coated textiles. According to Mårten Hellberg, CEO at OrganoClick, the binders currently in use are mainly made of petroleum based substances. OC-biobinder is composed completely of renewable substances that are non-toxic for humans and are biologically degradable.

“The textile processing industry has for many years relied on chemicals that are very effective, but on the other hand are often not degradable in nature and even may cause severe effects on eco-systems or on human health,”Hellberg said.“As customers are starting to realize this problem, we believe that our new products have a tremendous potential for textile manufacturers or textile product brands desiring to combine sustainable and organic textiles with functionality.”

Founded in 2006, OrganoClick AB is a spin-off company from Stockholm University and the University of Agricultural Science in Uppsala, Sweden. OrganoClick AB develops and manufactures bio-fibre materials and chemical products with highly specialized functions using its proprietary OrganoClick technology platform for modification of bio-fibres.

Source:www.organoclick.com

Today a major spinning manufacturer that the individual specification of FDY rises hundreds in China-Shengze market, and others are unchangeable, now the quotation of FDY50D/24F is 15,900RMB per ton (acceptance for six months), the quotation of FDY50D/48F is 16,600RMB per ton, and the quotation of DTY150D/144F is 17,000RMB per ton (acceptance for six months), however, the quotation in stable in another major melting spinning factory, now the cash quotation of FDY50D/72F is 17,400RMB per ton. The manufacturer reflects that the inquiry atmosphere is general in the morning. In addition, the local mainstream polyester filament price continues to be stable in China-Tongxiang market, now the accepted quotation of low-elastic DTY150D/48F is 15,850RMB per ton in a big factory, and the accepted quotation of POY150D/144F is 14,850RMB per ton. The manufacturer reflected that the production and marketing was in 110% or so in the previous day. Furthermore, today a big factory that the individual POY filament offers down 100-150RMB per ton in the local China-Taicang, and FDY keeps unchangeable, now the quotation of POY75D/36F is 15,100RMB per ton, the cash quotation of POY150D/144F is 14,700RMB per ton, and the cash quotation of FDY50D/24F is 15,400RMB per ton. The manufacturer reflects that the inquiry atmosphere is ok in the morning. Source:168Tex.com