In the first half of 2019, China’s GDP growth slowed to 6.3%, the lowest since the 1990s, and other macro data are equally disgraceful. In the first half of the year, the Sino-US trade war is still in full swing, market confidence continues to decline, the trade war conduction effect has swept through all industries, the pain is inevitable. China’s zipper in the first half of the same face no small pressure, mainly in the peak season, prices fall, enterprise window period extension and so on. Influenced by factors such as slowing growth in domestic demand and squeezing profits, domestic demand zippers are also showing a state of tepidness, competition in the industry is very fierce, the low-end price war into a white-edged battle. In the zipper import and export seems to be a little better, zipper import and export overall situation levelled off, zipper imports continued to decline, zipper exports rose slightly, the value-added of export products has not been reversed in recent years, China’s zipper transformation and upgrading still has a long way to go.
First, the overall situation of zipper import and export is stable
According to customs statistics, in the first half of 2019, China’s total import and export of zippers amounted to US$722 million, an increase of 1.62% over the same period last year, a further decline. Among them, zipper imports amounted to US$113 million, down 15.72% YoY, and zipper exports amounted to US$609 million, up 5.66% YoY, and the trade surplus of zipper imports and exports further expanded to US$496 million. Compared with the same period last year, China’s zipper export fundamentals remained balanced, while zipper imports continued to decline significantly, import and export surplus continued to expand compared with previous years. This mainly benefited from the continued depreciation of the RMB exchange rate in the first half of the year to stimulate the export of zippers and curb imports, making China’s zipper more competitive price, on the other hand, the gradual decline of imported zippers also indicates that the quality of domestic zippers in a further enhanced, with the same alternative conditions. In addition, affected by the trade war, China’s clothing exports weakened, while other emerging textile and clothing markets such as Vietnam, Bangladesh and other regions are growing at a high rate, which also to China’s zipper exports to create a good market opportunity.
On a monthly basis, zipper exports in January were US$123 million, up 21.82% YoY, while zipper imports were US$1.15 billion, down 15.1% YoY; Zipper exports of US$0.94 billion, up 51.07% YoY, zipper imports of US$0.22 billion, down 9.06% YoY; Zipper exports were US$124 million, up 8.01% YoY, and zipper imports were US$0.21 billion, down 24.87% YoY. As can be seen from the figure below, due to seasonal influence, China’s zipper import and export in February showed a low state, and then gradually warmed up, to May, zipper exports reached a peak, and then entered the seasonal downing phase.
By product type: In the first half of the year, total imports and exports of metal zippers were US$123 million, down 8.16% YoY, of which metal zipper imports were US$111 million, down 26.81% YoY, and exports of metal zippers were US$112 million, down 5.69% YoY Total imports and exports of nylon and injection-molded zippers amounted to US$401 million, up 6.03% YoY, of which US$0.54 billion was imported, down 14.69% YoY, and exports were US$347 million, up 10.21% YoY; Imports were $448 million, down 13.75 percent year-on-year, and exports were $151 million, up 5.06 percent year-on-year. As can be seen from the following icons, nylon and injection-molded zippers remain the main force in the export of the entire zipper, accounting for 57% of total exports, and growth is evident. In the first half of this year, metal zippers showed significant signs of decline, both in and out of the country, into a weak state. Zipper spare parts exports continue to maintain growth, import decline, indicating that China’s zipper parts in the strength of growing, the industrial chain has a strong foundation.
Second, zipper exports show an upward trend, import and export prices disparity
In the first half of the year, China’s exports of metal zippers amounted to 267 million meters, down 4.63% YoY, while exports of nylon and injection-molded zippers amounted to 2.622 billion meters, up 9.18% YoY, and exports of zipper parts were 25,339 tons, up 5.25% YoY. Metal zipper export volume fell for the first time, it can be said that this year is a low point in the development of metal zippers, in order to supplement the market metal zipper shortage, nylon and injection zipperin in the context of increasing macroeconomic downward pressure upward. In terms of import and export prices, the average import unit price of metal zippers in the first half of the year was US$1.09/m, up 3.9% year-on-year, while the export unit price was US$0.42/m, down 1.11% yo-yo Y.S., and the average import unit price of nylon and injection-molded zippers was US$0.83/m. YoY increased by 9.74 per cent, with export unit price at US$0.13/m, up 0.38% YoY, while import edgy parts were US$17.76/kg, up 0.73% YoY, and export unit price was 5.95%, down 0.19% YoY. Statistics show that the average price of zipper imports generally rose, but not much, export prices, metal zipper and zipper parts prices continued to decline, but the decline is still under control, basically remained stable. As nylon and injection-molded zippers continue to move towards quality, alternative enhancement, export prices show a small upward momentum. In addition, the import price of zippers still maintain a relatively fast growth momentum, and the price difference with domestic zippers is getting bigger and bigger, The pace of China’s zipper in high value-added products significantly lagbehind in foreign high-end zippers, China’s zipper has a long way to go, which also shows that domestic zippers in the high-end zipper market there is still a lot of room for rise.
Third, zipper export pattern
In terms of export regions, in the first half of the year, the top ten provinces of China’s zipper exports were: Zhejiang, Guangdong, Fujian, Jiangsu, Shanghai, Guangxi, Liaoning, Shandong, Xinjiang and Jiangxi, with export values of US$213 million, US$164 million and 0 US$51 million, US$0.5 billion, US$0.48 million, US$0.17 million, US$0.13 million, US$0.11 million, US$0.11 million, US$0.07 billion. The top 10 provinces accounted for 95.9% of the country’s total zipper exports. Among them, Zhejiang and Guangdong as zipper export provinces, the two provinces accounted for 61.79 percent of the country’s total zipper exports, followed by Fujian, Jiangsu, Shanghai and other regions also formed a certain scale of zipper exports, the above five provinces as the main distribution area of China’s zipper industry base, export-driven effect is still very obvious, and this export pattern will not change much in the short term. From the competitiveness of exported finished zipper products (striped zippers and code-mounted zippers). The average export unit price of finished zippers in Liaoning region was the highest, reaching US$0.63/m, followed by shanghai, with an average export unit price of US$0.55/m, which was significantly above the national average, which also benefited from the export of mid- and high-end zippers in YKK Dalian and Shanghai, which greatly enhanced the competitiveness of zipper products in Shanghai. As the first export of Zhejiang region, zipper son products are ranked last, the average export unit price of 0.2 dollars / meter, Zhejiang region large and medium-sized enterprises, industrial base is also more, price competition is more intense, which has become a difficult point of transformation and upgrading in the region. It is worth noting that in recent years, the export of zippers in the central and western regions has shown a clear growth trend, Jiangxi, Xinjiang, Guangxi, Anhui and other regions based on location advantages are constantly joining the ranks of China’s zipper industry cluster.
Fourth, China’s main export countries and regions of zipper
In the first half of 2019, China’s main export countries and regions for zippers were (top 10) Hong Kong, Vietnam, Myanmar, Bangladesh, India, Indonesia, Cambodia, Turkey, Pakistan and Russia, with corresponding exports amounting to US$78 million, US$71 million, US$48 million, US$39 million, US$ 29 million, US$027 million, US$025 million, US$024 million, US$0.16 million and US$0.13 million. China’s zipper exports to the top 10 traditional markets were basically the same as in previous years. Hong Kong area is still China’s zip-re-export trade, in recent years, China’s trade friction increased, international trade investigation frequency, so that re-export trade is increasing. The top 10 export markets accounted for 62% of China’s total zipper exports, up from last year. It is worth noting that exports to Bangladesh, Myanmar, Vietnam, India and other Southeast Asian markets showed a year-on-year growth trend, seven of the top 10 belong to the Southeast Asian market, accounting for 43% of China’s total zipper exports.
Fifth, the second half of the zipper industry outlook
On the evening of August 5th, the yuan’s midpoint against the dollar fell below the 6.92 mark, and on August 6th, both onshore and offshore yuan broke the “7”, and by the time of writing, the yuan was still hovering around 7.05 against the dollar. RMB exchange rate broke “7”, is the first time since the 2015 exchange rate reform, the central bank immediately sounded the urgent voice, said that breaking “7” is normal, by unilateralism and trade protectionism, especially in early August the United States announced in September officially China’s 300 billion U.S. dollars plus 10% tariff and other expected impact, the RMB depreciation against the U.S. dollar is inevitable This is the normal market reaction. Breaking the “7” obviously has a huge impact on China’s economy, the depreciation of the rmb, meaning that the relative value of the yuan is declining, for ordinary people is worthless money, consumer confidence has a big blow. For the enterprise sector, especially in the current severe economic situation, the rmb depreciation is relatively favorable than negative, especially in the export composition of greater positive. Textile and clothing is one of China’s traditional advantages of export industries, in recent years by the appreciation of the RMB exchange rate, rising raw material costs and inventory expansion of the impact of the entire industry in the international market competitiveness has been weakened, textile and clothing exports showed a year-on-year decline. This also makes the textile stocks are mostly at a relatively low level in the two markets, the entire textile industry’s share price attractiveness has dropped significantly. With the current round of RMB depreciation, China’s textile and clothing can be said to usher in a wave of small Yangchun, according to authoritative statistics, each 1% devaluation of the RMB, textile and garment industry sales profits rose 2%-6%, making textile and garment export competitiveness further enhanced, may be in the second half of the export trend will be a certain improvement, is expected to return to normal levels, At that time, with the textile and clothing highly related zipper products will naturally have a good market, especially in the summer and autumn clothing zipper use surge, may usher in a wave of small climax.
Recently, the U.S. has been moving, first by cutting interest rates at the Federal Reserve and then by announcing a 10 percent tariff on China’s remaining $300 billion in exports to the U.S., which went into effect on September 1. First of all, the U.S. interest rate cut caused the world to follow the interest rate cut, but China’s central bank has not released a rate cut plan, but through the reduction, reverse repurchase operation, MLF operation and so on to the market to put money will be a big probability event, so, the second half of the monetary policy will be relatively loose, market stimulus plan and policy may be introduced in the second half of the intensive, This will undoubtedly bring about a certain degree of inflation, long-term will bring a certain amount of pressure to zipper enterprises. In addition, the tariff barriers of the Sino-US trade war have covered all Chinese goods, textiles and clothing, bags of shoes and so on have inevitably fallen, the second half of the textile and clothing exports decline has become an indisputable fact. However, the total demand for global spinning clothing has not declined, so, textile re-export processing trade will rise, China’s textile and garment enterprises to Southeast Asia and other regions will be accelerated, Southeast Asia’s textile bags and other industries in the future will have a relatively large growth, the overall demand for zippers will not appear significantly, But zipper exports will certainly have a certain growth, imports are also relatively lower. Due to the pressure of the situation downstream of spinning clothing, the price and profit of Chinese zippers may be lower than expected, and the price of low-end metal zippers and nylon and injection-molded zippers will fall further, which is also a note worthy of our attention.
Overall, in the second half of the year, the risk has been in a state of superposition, but also there are good hedging such as the depreciation of the RMB, zipper industry in general run smoothly, but the downward pressure of the industry is still large, reflected in the external demand is not strong, the industry competition intensified, for small and medium-sized zipper enterprises in particular difficult to survive. On the export side, the second half of the year will still show a state of volume rise and fall, especially the metal zipper will still be in a low position, metal zipper contribution to corporate profit growth will further decline. 2019, can be said to be China’s reform and opening up more than 40 years of the most difficult year, this is the performance of economic cyclical, but also at this point in time, trade wars and capital market thunder and other black swan events, as well as the recent focus of China’s Hong Kong and Taiwan issues highlighted … This year is destined to be an extraordinary year, whether for ordinary people or enterprises, economic risks increased sharply, the second half of the year, we should continue to maintain a cautious attitude, do not blindly invest in expanding production, strictly control enterprise costs, strengthen the management of revenue accounts, to ensure adequate enterprise cash flow, ready to deal with the second half of the new round of difficulties.