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Market Weekly Report | The RMB exchange rate is strengthening, and the export volume of down and its products is facing a sharp drop; La Nina is approaching, but the possibility of affecting winter is limited

2024-09-22 来源：金绒浏览量：575

Market Summary

In the 38th week of 2024 (9.16-9.22), the market was generally stable, with white duck down rising slightly.

Foreign trade data for August released by the customs showed that the export volume of down feathers for filling increased slightly year-on-year and decreased slightly month-on-month, but the export value fell sharply both year-on-year and month-on-month. The export of down clothing remained sluggish, setting a new low for August in the past decade.

However, the export of down bedding continued its upward trend this year, with the export of down quilts soaring by 30% compared with last month. In August this year, the US container import data was strong, and China's imports increased by 17.2% compared with August last year, accounting for 39.3% of the total US container imports.

Good News This Week

The RMB exchange rate strengthened after the Fed cut interest rates, and China's exports may benefit

On September 18, local time, the U.S. Federal Reserve announced that it would lower the target range of the federal funds rate by 50 basis points to a level between 4.75% and 5.00%. After the Fed's first rate cut since March 2020, the RMB exchange rate against the U.S. dollar strengthened.

The RMB exchange rate against the U.S. dollar rose to a high of 7.0605 during the session, up nearly 300 points from the previous trading day. It closed at 7.0660 at 16:30, up 233 basis points from the previous trading day, setting a new high since the end of May 2023.

From 1982 to 2019, the United States has cut interest rates seven times. According to historical data, during the US dollar interest rate cut cycle, the probability of RMB appreciation against the US dollar is higher. After the Fed's interest rate cut this time, it is expected that the RMB may appreciate against the US dollar.

Analysts said that the recent trend of the RMB reflects the anticipation of the Federal Reserve's interest rate cut cycle. Non-US currencies are generally rising, and the reason behind the RMB's rise this time is the Federal Reserve's interest rate cut, which may stimulate overseas economic growth and boost the demand side, which may be a favorable factor for China's exports.

source | 深圳商报

The probability of La Nina arriving at the end of this year is high, but it may not have much impact

The World Meteorological Organization (WMO) predicts that the probability of transitioning from the current neutral (neither El Nino nor La Nina) to La Nina is 55% between September and November 2024, increasing to 60% between October 2024 and February 2025.

La Nina refers to a large-scale cooling of sea surface temperatures in the central and eastern equatorial Pacific, accompanied by changes in tropical atmospheric circulation, which has a cooling effect on the global climate. But the WMO said that despite the frequent occurrence of La Nina in the past few years, the nine-year period is still the warmest on record.

Unlike the WMO's forecast, data from the US National Oceanic and Atmospheric Administration (NOAA) shows that there is a high probability that La Nina will occur this year. It reported that there is a 71% probability of La Nina occurring from September to November and an 83% probability of occurring from November to January next year.

By comparison, NOAA's forecast last month gave a 66 percent chance of a La Nina event between September and November, so the odds have slightly increased, but forecasters believe a weak La Nina is the most likely scenario.

A weak La Nina will not have much impact on global atmospheric circulation patterns, which means the likelihood of a typical impact on winter climate is low. However, even a weak La Nina can still affect winter climate and may affect the weather center's winter forecast.

Current forecasts show that the probability of this round of La Niña event reaching an informal "moderate" peak is about 40%, indicating that the intensity of La Niña is expected to weaken.

source | 金绒采编自NOAA、ENSO博客

The textile industry is in the recovery stage after a long-awaited explosion in production and sales

With the arrival of the "golden September and silver October", the weaving machine operation rate has increased significantly, and the order volume has gradually increased. In addition, the polyester end has staged a "roller coaster" market, and after bottoming out and rebounding, the production and sales of polyester have rebounded sharply; on the printing and dyeing end, the number of grey cloths entering the warehouse has increased, and the delivery time has been extended to about 7 days, and some varieties require about 12 days.

According to monitoring data from Silk City Network, as of September 13, the operating rate of weaving enterprises in the sample has rebounded to 76.2%, an increase of 8.3% from the same period in August. A company specializing in nylon spinning said, "Since September, the textile market atmosphere has gradually improved. The current order situation is still good. The factory's operating rate is 100%, which has increased compared with the beginning of August."

The company also admitted, "The price of nylon fabric has risen recently, and our nylon product quotations have all been raised to varying degrees." When the focus of the textile market shifts from spring and summer to autumn and winter, nylon fabric, as the mainstream fabric in autumn and winter, is prone to centralized purchasing and hoarding, which in turn creates a wave of demand in the market.

Whether it is the rebound of the polyester industry chain, the recovery of weaving machine operating rate, or the increase in the amount of goods entering the dyeing factory, all signs indicate that the textile industry is in the recovery stage. Judging from the feedback from textile companies, most of them are cautiously optimistic about the peak season.

source | 布工厂

Who says down jackets can’t sell? One merchant sold out 300,000 pieces in one summer

Severe homogeneous competition, rising prices, and changing consumer fashion concepts... In recent years, voices have been heard from time to time that down jackets are not selling well and are being ignored. However, this summer, the down jacket business at Pinghu China Garment City, the country's largest professional down jacket market, is booming.

Pinghu China Garment City is a busy place these days, with carts full of goods everywhere. Store entrances are filled with newly arrived down jackets, ready to be shipped to all parts of the country. Yang Long, the brand manager of Moshang, is also busy receiving merchants from all over the country and taking inventory of sales, and he is very busy.

"We have been selling off-season products since March." Yang Long calculated that 300,000 off-season down jackets were basically sold out this summer, with sales of more than 30 million yuan. "Off-season sales have brought back a certain amount of funds for us to better prepare for winter."

The off-season items sold by Yang Long are all the best-selling items last year. However, unlike the regular season items, which are mainly “90% duck down” (i.e., 90% down content), the off-season items are mainly “50% duck down.” Although its warmth retention and comfort are slightly inferior to “90% duck down,” it is better because of its low raw material cost and low processing fee in summer, so the price is naturally more affordable. This satisfies consumers’ desire to “get a bargain” by buying off-season products.

"Currently, most business operators are improving product quality by strengthening original design, so as to better break through the off-season and peak-season restrictions of down jackets." Chen Jie, operations director of Pinghu China Garment City, said that originality has brought stronger competitiveness and achieved long-term sales.

Develop new models after the Spring Festival, make plates and samples in the spring, hold order meetings in May, sell off-season models in the summer, hold order meetings in August, enter the peak of procurement in September, and sprint sales at the end of the year... Nowadays, "orders in all seasons, no idle time in any season" has become the norm for practitioners in the Pinghu down jacket industry.

source | 工人日报

Bad News This Week

Exports of processed feathers, down and their products may decline again in August

According to Chinese customs data, from January to August 2024, the total export value of "processed feathers, down and their products; artificial flowers; human hair products" was RMB 4,875,860 million, a cumulative increase of 3.3% over the same period last year.

The total import value of this commodity seal from January to August was RMB 665,343 million, a cumulative increase of 14.7% over the same period last year. The import value of this commodity seal continues to be high, but has been on a downward trend since the beginning of the year, while the export value is facing a sharp drop.

In August this year, the total export value of "processed feathers, down and their products; artificial flowers; human hair products" was RMB 516,349 million, a decrease of 13% year-on-year and a decrease of 10% from July; the total import value was RMB 73,439 million, a decrease of 6% year-on-year and a decrease of 1% from July.

At present, although "processed feathers, down and their products; artificial flowers; human hair products" maintained a growth trend in international trade in the first eight months, they have continued to decline since July. This monthly fluctuation may indicate the instability of the export market in the short term, or it may be due to exchange rate fluctuations.

source | 金绒采编自海关总署

News Situation

Normally, the appreciation of the RMB is not conducive to exports, but the reason behind the current appreciation is the interest rate cut by the Federal Reserve. As the US dollar enters a cycle of interest rate cuts, the global economy is expected to recover, so this may be a favorable factor for China's exports. However, this favorable effect is unlikely to appear immediately.

The La Nina phenomenon usually brings cold winters to the northern hemisphere. Although the La Nina predicted this year is weak, even a weak La Nina may affect China's winter climate. Based on past experience, cold weather is usually a strong driver of down product sales and is beneficial to the down industry.

With the arrival of the traditional peak season of "Golden September and Silver October", the textile industry as a whole is showing signs of recovery. This recovery will also radiate to the down industry, especially the demand for down clothing in autumn and winter. On the fabric side, the production and price of autumn and winter fabrics such as nylon taffeta have increased, indicating that the market demand for autumn and winter clothing is strong.

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