The 41st Zhangjiagang Wool Merchants Association
Wool Salon in Nantong, Jiangsu
Grandly Convened
The "41st Zhangjiagang Wool Merchants Association Wool Salon," hosted by the Zhangjiagang Wool Merchants Association and undertaken by Jiangsu Jubai Wool Products Co., Ltd. and Nantong Hongyang Plush Products Co., Ltd., was grandly held on the afternoon of November 26, 2023 (Sunday) at the Nantong Binhai Jinshi International Hotel (Tongzhou Bay Conference Center). More than 300 people attended the conference, including CEOs, experts, business managers from wool enterprises across the country, and some overseas guests.
Xiao Jinwen, Secretary-General of the Zhangjiagang Wool Merchants Association, presided over the conference. Secretary-General Xiao Jinwen first expressed his heartfelt gratitude for the successful convening of the 41st Zhangjiagang Wool Merchants Association Wool Salon, thanks to the meticulous preparations of Chairman Mao Zhengrong and General Manager Huang Yubing of Jiangsu Jubai Wool Products Co., Ltd., and the high importance and strong support of Secretary Lu Zhong Hua and Director Shi Hongjie of the Tongzhou Bay Demonstration Zone and relevant government departments. He also introduced the main leaders and guests attending the meeting.
Secretary-General Xiao said that the current society has entered a period of great transformation. The turbulent international situation has brought unprecedented difficulties to the wool textile industry. The industry has been affected by multiple complex and uncertain factors such as the external environment, market demand, and exchange rate fluctuations. It is indeed not easy for us wool people to have persevered to this day. We wool people are gathered here today to jointly review the extraordinary year of 2023, analyze the situation, summarize experience, discuss the way forward, and seek direction for 2024. In the new year, we must control ourselves and our future based on our own strengths, so that we can avoid detours and wrong paths in 2024! I hope this meeting will bring you harvest, benefits, and good luck!
Then, Secretary-General Xiao announced the opening of the 41st Zhangjiagang Wool Merchants Association Wool Salon!
Dr. Ji Qianlong, President of the Zhangjiagang Wool Merchants Association and Chairman of Zhangjiagang Yangzi Fine Combing Wool Top Co., Ltd., delivered an opening speech.
President Ji Qianlong extended his warm congratulations on the successful convening of the conference on behalf of the Wool Merchants Association! He extended a warm welcome to all the guests! He expressed his heartfelt gratitude to the leaders of the Tongzhou Bay Demonstration Zone and Chairman Mao Zhengrong and General Manager Huang Yubing of Jiangsu Jubai Wool Products Co., Ltd. for their strong support and meticulous preparation of the conference!
President Ji Qianlong said that this wool salon is the third conference held by the association this year. More than 300 guests attended today, covering leaders, entrepreneurs, and experts from various links in the wool textile industry chain. The active participation of everyone is a great support for the Wool Merchants Association and the organizers! He hopes that through this conference, everyone can analyze the market, exchange market conditions, deepen cooperation, enhance friendship, and work together to explore the development direction of the wool industry!
President Ji also specifically reported to everyone on the situation of the wool industry investigation tour to Australia and New Zealand organized by the Wool Merchants Association from November 4 to 15 this year. Since the beginning of this year, the momentum of global economic recovery has been unstable, and wool textile enterprises are also facing pressure from various aspects. After the three-year interruption of external exchanges in the wool industry due to the epidemic, it is urgently needed to deeply understand the latest changes in the global wool market. Therefore, the Wool Merchants Association organized members to visit Australia and New Zealand in November 2023 to visit local wool testing, auction, and service agencies and conduct in-depth exchanges with wool exporters in various places. During the event, the delegation visited the Australian Wool Testing Authority (AWTA), the Australian Wool Exchange (AWEX), the Australian Wool Innovation (AWI), and the New Zealand Wool Services International (NZWSI), and conducted in-depth exchanges with the presidents and heads of various wool agencies. At the same time, the delegation visited Australia and New Zealand and received a warm welcome from wool suppliers in various parts of Australia and New Zealand. We conducted full and in-depth exchanges on the domestic wool textile situation and the foreign situation with some major wool suppliers in Australia and New Zealand. We also shared our exchanges with overseas wool agencies with domestic wool industry colleagues in a timely manner through the Wool Merchants Association WeChat platform.
Finally, President Ji Qianlong once again thanked everyone for coming to Nantong to participate in the 41st Wool Salon Conference, sincerely wished the wool textile industry prosperity and prosperity, wished the wool people good health, and wished the 41st Wool Salon of our Wool Merchants Association a complete success!
Mao Zhengrong, Chairman of Jiangsu Jubai Wool Products Co., Ltd., delivered a welcome speech.
Chairman Mao Zhengrong first expressed his heartfelt gratitude to the Tongzhou Bay government. It is precisely because of your support and help that Jubai Company can steadily develop here! The government's care and support for our company, including providing a superior investment environment, supporting infrastructure, and effective market supervision, have all provided strong support for our development. At the same time, please allow me to extend a warm welcome to all the guests on behalf of all the employees of Jiangsu Jubai Wool Products Co., Ltd., and express my heartfelt gratitude to my colleagues.
At this wool salon conference, we have invited experts, scholars, entrepreneurs, and industry colleagues to jointly discuss the development trend of the wool market and share experience in mechanism innovation and fashion expansion in the wool field. We hope that through this conference, we can enhance communication and exchange among colleagues, stimulate innovation, and contribute wisdom and strength to the prosperity and development of China's wool textile industry.
Finally, Chairman Mao Zhengrong wished the wool salon conference a complete success, wished all the guests good health and smooth work, and wished the comrades to make further progress.
Shi Hongjie, Deputy Secretary of the Party Working Committee and Director of the Management Committee of the Tongzhou Bay Demonstration Zone, gave a speech.
Director Shi first extended the warmest welcome to all the guests on behalf of the Party Working Committee and Management Committee of the Tongzhou Bay Demonstration Zone! He expressed his heartfelt gratitude to Chairman Mao Zhengrong of Jiangsu Jubai Wool Products Co., Ltd. and Chairman Huang Yubing of Nantong Hongyang Plush Products Co., Ltd. for their meticulous preparation of the conference and their efforts in building a platform for communication and cooperation between the Tongzhou Bay Demonstration Zone and the guests of the Wool Merchants Association! Director Shi then gave a detailed introduction to the situation of the Tongzhou Bay Demonstration Zone. He welcomed everyone to come to the Tongzhou Bay Demonstration Zone for frequent visits, exchanges, investment, and business.
Ni Wei, member of the Party Working Committee of the Tongzhou Bay Demonstration Zone, made a special promotion on investment attraction.
Tongzhou Bay is a national strategic highland. Tongjiang, Tonghai, and Tongzhou Bay are a simple introduction to Nantong. Nantong is located at the northern mouth of the Yangtze River, a gateway between the river and the sea. Nantong has six major industries, and in 2022, its total output value exceeded one trillion yuan, joining the trillion-yuan club. Textiles are also a pillar industry in Nantong. The textile industrial park is closely related to our entire wool textile industry, and our work focuses on building a professional park centered on high-end fabric processing. So far, 32 companies have entered the park, of which 11 have already started production, and 15 have been topped out and are about to start production. We will leverage our port advantages to build a textile export trading base, and at the same time, use our supporting facilities to build a home textile fabric production base, along with a Nantong dyeing base. This is the next step in the development plan for our entire textile park. Finally, welcome to all the experts from the Wool Association and our guests. Thank you for coming to Tongzhou Bay, and welcome to invest and start businesses in Tongzhou Bay.
Chu Jiewen, Technical Director (Woven Products), International Wool Secretariat, China, gave a special report on "Innovation of Merino Wool Woven Products under the Modern Textile Industry System"
The lecture first reviewed the history of wool woven products, which stemmed from humanity's early struggle for survival against nature. From the British Enclosure Movement to the Industrial Revolution era with the invention of the ring spinning machine, modern Chinese wool woven products have evolved from over one thousand spindles at the Gansu Weaving Bureau in the early days of the People's Republic of China to 130,000 spindles in the early years of the People's Republic of China, with a wool processing capacity of only 20,000 tons; to over 700,000 wool spinning spindles during the early years of reform and opening up, and currently 1.6 million wool spinning spindles, with a production capacity of 450 million meters of wool fabrics.
The current status of wool woven products in China: In the first three quarters of 2023, the production and supply of wool woven products remained sluggish. The output of above-scale woolen fabrics fell by 5.9% year-on-year, showing a significant decline compared to the high level of woolen fabric output in the same period of the previous year. The export of woolen fabrics reached 51.47 million meters, an increase of 4.6% year-on-year, while the export of woolen woven garments reached 11.85 million pieces, a decrease of 1.3% year-on-year.
There are significant differences in upstream fabric orders, and the operating load of factories is not ideal. The speed of product innovation varies, and marketing methods are uneven. Small factories are now struggling, always lagging behind large factories. Large factories are relatively better off, with stable customer sources, group orders, military supplies, and industry uniforms, while small factories find it even harder to survive.
Chu Jiewen believes that the way forward for wool woven fabrics is as follows:
First, personalization, fashion, and environmental protection are the trends. The development trend of wool woven products is that the formal wear market is shrinking, and now there is a call for differentiated and personalized products, focusing on the development of differentiated fabrics.
Second, the rise of the sports market. Its lightweight, elasticity, and functionality can be achieved with wool, but if other functional fibers are added, wool products will be even better. The traditional concept is that wool can only be used for formal wear, and mostly for autumn and winter. There are very few spring and summer options. Our current concept is that wool can be worn year-round. By using different finenesses, selecting different raw materials for different markets, and blending with functional fibers, and through post-processing, we can meet the needs of the sports market and the market throughout the year.
Third, the development trend of wool woven products also includes home business, commuting, high-count and ultra-high-count yarns, luxury, and easy care, which are all our future development directions. There are still many markets for wool woven products to be explored.
Fourth, deep expansion into home decoration and accessories. Nantong is a very famous home textile base in China, and the market for home textile soft furnishings made of wool is huge. Clothing accessories and industrial fabrics are also the direction and trend of wool woven product development.
Although wool has its own advantages, our products must also adapt to the market. We need to mix, blend, and complement wool with other high-performance fibers. Sustainable development is a very important direction for our future development, and the concept of biodegradable and sustainable products will gradually be accepted by consumers.
In general, innovation is inspired by brand demands. If you have brand needs, we will continuously practice in that direction according to your needs. The use of new raw materials, products suitable for new scenarios, and products with renewable and sustainable environmental protection concepts. This is a common global concept and is irreversible.
Chu Jiewen also introduced some examples of products that the International Wool Secretariat has been working on in terms of wool innovation in recent years, including stretch wool, plant dyeing, and easy-care products, and gave detailed explanations.
In conclusion, the development of so many products is centered around green and sustainable development. In the future, wool woven products will inevitably be diversified in raw materials, fashionable, lightweight, and companies will transition from single production to production plus services. The Matthew effect will become increasingly apparent, and profits will gradually concentrate on leading companies.
Wu Huijun, CEO of Importbao and Chairman of the Yangtze River Delta Textile and Garment Industry Chain Innovation Center, gave a special report on "From Fiber to Fashion—Importbao's Digital Layout"
In his speech, Mr. Wu started with two major pain points faced by wool people: funding issues and price prediction. The Importbao team seized the opportunity to solve these two problems through the development of digitalization in the wool industry: solving funding problems through digital platforms and trading centers, and the company is also trying to solve the problems of equity funds and downstream receivables; through digital platforms, it is possible to better manage the supply chain, optimize operating models, and improve efficiency.
In addition, Importbao has seized the opportunity of digital layout from fiber to terminal. From the underlying platform to the entire terminal, and then to the backend investment, orderly production is realized. Through the digital platform, Importbao and its customers can better understand market trends, predict price changes, and use this as a basis for production arrangements and supply chain management.
Mr. Wu pointed out that in the wool industry, different operating models provide inspiration for wool industry peers. Upstream, it is more of a trading platform; for the center, it relies on financial strength; the process is an interactive competition, and the benchmark is cost; while the terminal is more about how users consume. These different operating models remind everyone to better manage the supply chain and industry communication. At the same time, Importbao is striving to achieve a global supply chain management and industry vertical platform. The Importbao team, from wool trading centers, cotton trading centers to R&D centers, uses these trading platforms to organize different supply chains for everyone. At the same time, in the process of promoting the digital development of the wool industry, a mechanism for digital marketing, management, and prediction is established.
Mr. Wu emphasized that the digital age provides more opportunities and possibilities for wool practitioners. Practitioners should embrace this era and use data to optimize their business operations and supply chain management. Through digital platforms and trading centers, Importbao can provide wool industry practitioners with better tools to understand market trends, predict price changes, optimize operating models, and improve efficiency. These will have a positive impact on practitioners' businesses.
Finally, Mr. Wu expressed special gratitude to Mr. Ji Qianlong, President of the Wool Merchants Association, for his support and assistance to Import Treasure. Import Treasure also hopes to cooperate with more enterprises to jointly promote the development of the wool industry.
Mr. Feng Bing, General Manager of Ningbo Xingsuo Textile Trading Co., Ltd., delivered a special speech titled "Fragmented 2023"
At the Zhejiang Haining Wool Salon Conference in December 2019, I gave a special report titled "Approximately in Winter." Winter 2020 arrived. At the Haining Wool Salon Conference in May 2021, I gave another special report titled "The Joys and Sorrows of the Wool Industry." Before we could enjoy much joy, 2022 brought hardship. My report's title was "Fragmented 2023." Will this fragmentation end in the coming year, or will it intensify?
Reform and opening up and globalization have promoted the development of China's wool textile industry. Foreign companies entered the Chinese market, township enterprises flourished, and private enterprises also grew, forming several major wool textile industry clusters, making China the most complete and important link in the global wool textile industry chain. This is the achievement of 40 years of reform and opening up and globalization. Currently, China has become the global center of the wool textile industry. We have provided the world with a large number of high-quality and inexpensive textile products. Domestic clothing consumption is also growing steadily.
In the 1990s, with the advent of reform and opening up, the import volume of wool increased continuously. By 2018, China's wool imports reached a peak of approximately 377,000 tons, while in the 1980s it was only over 60,000 tons. China's proportion of wool imports from Australia has also increased, from over 30% in 2000 to 80% today. The entire wool textile industry has also become the global center, importing a large amount of wool and providing a large number of wool textile products to people all over the world. Reform and opening up and globalization have changed the global wool processing and manufacturing landscape.
After decades of hard work, the wool textile industry has also flourished. During its development, there have been positive aspects, with production capacity continuously expanding and technology constantly improving. The quality of domestic wool tops has improved, and the variety is wider than before. These are good things for industrial development. However, rapid development has brought problems. The manufacturing end of wool textiles has reached its capacity, while the upstream wool production has decreased, and the downstream wool consumption has also decreased. China's wool textile industry presents an olive-shaped structure, small at both ends and large in the middle.
What impact does the olive-shaped structure have on us? In previous years, when popular products emerged, everyone rushed in, causing a surge in wool prices and disorderly expansion in the production process. This disorderly expansion led to involution. This year, the market demand for wool textile products is poor, there are no best-selling products, causing wool prices to fall and involution to intensify. Some small and micro-enterprises are leaving the industry, accelerating the process of updating and iteration.
This year, textile exports have shown a rise followed by a decline. The decline in textile exports in the first nine months, calculated in US dollar value, has been relatively large. In the first nine months, imports of clothing from China by developed economies have also declined. One factor is the transfer of some orders to other countries, and another major factor is that too many orders were placed abroad last year, and the demand in Europe and the United States has weakened, affecting the reduction of inventories by foreign companies. From the perspective of the export volume of wool textile products, exports in the first half of the year were better than in the second half. The decline in exports may continue until the end of the year. For our entire wool textile industry, domestic demand is weak, and foreign demand has also slumped, so everyone feels that times are very difficult.
In the past, the textile industry shifted to Southeast Asia, mainly considering two factors: one is labor costs, and the second is trade preferences from other countries. Now we are facing the issue of supply chain reorganization. How big is the impact on the wool textile industry, and how great is the influence? This is worth our attention.
The scale of wool top manufacturing is large and requires a lot of capital. I think wool top manufacturing will remain in China, and the export volume of wool tops should continue to increase in the future. However, from the perspective of wool spinning, the demand for fine-spun yarns in Southeast Asia will continue to grow, but the source of growth may not all come from China; it will come from countries within the Southeast Asian region.
Therefore, in 2023, a fragmented pattern emerged. The market demand for wool textile products is fragmented, orders for wool textile products are fragmented, and the production efficiency of enterprises is fragmented, while large, medium, and small enterprises are becoming increasingly polarized.
Recently, the prices of Australian wool and exchange rates have both risen, and everyone is a little happier, but we don't know how long it will last. The demand for coarse wool has also increased, including skin-clipped wool. The demand in the Tongxiang market is also improving. It's almost the end of the year, and we see a glimmer of hope. Since the beginning of this year, New Zealand wool prices have risen. In addition to the increase in demand in the Chinese market, the demand for New Zealand wool in Europe, Southeast Asia, India, and Pakistan has also increased, jointly promoting the rise in New Zealand wool prices. We can also see some clues from the regionalization of global trade.
Wool prices are always related to the global economy. When the global economy is doing well, wool prices are also doing well. When the global economy weakens, wool prices will definitely be affected. This year, the global economy has been generally unsatisfactory, and next year will not be much better. Therefore, for wool prices to rise sharply, there is a lack of strong support. If China's economy continues to develop vigorously, it will be good for the consumption of wool textile products. The domestic demand market for wool textile products is large, and temporary fluctuations do not represent the long-term direction.
We have all experienced too many ups and downs in wool prices, and most small and micro-enterprises have survived. But now, small and micro-enterprises face more survival issues, and we hope they will not be harvested like leeks.
We hope that 2024 will gradually recover, not just market demand.
Wool Industry Chain Elite Face-to-Face
Mr. Feng Bing, the host and General Manager of Ningbo Xingsuo Textile Trading Co., Ltd., interacted with Ms. Yang Xiaoxiong, head of the China-Australia, China-New Zealand, and China-Southern Africa wool working groups; Mr. Song Tengfei, Australian/New Zealand wool sales agent; Mr. Qian Yaoyu, chairman of Zhangjiagang Jinmeng Weaving and Dyeing Co., Ltd.; Zhangjiagang
Wool Merchants Association President
, Dr. Ji Qianlong, chairman of Zhangjiagang Yangzi Fine Combed Wool Top Co., Ltd.; Mr. Huang Yubing, chairman of Nantong Hongyang Plush Products Co., Ltd.; Mr. Zhang Weixue, procurement manager of Zhejiang Xinao Textile Co., Ltd.; Mr. Gao Baolin, chairman of Shanghai Zhonghao Knitting Co., Ltd.; and other attendees in an in-depth discussion and lively interaction on various aspects of the entire wool textile industry chain.
Host: Mr. Feng Bing, General Manager of Ningbo Xingsuo Textile Trading Co., Ltd.
Ms. Yang Xiaoxiong, Head of the Chinese Working Group of the China-Australia, China-New Zealand, and China-Southern Africa Wool Joint Working Group
Mr. Feng Bing: Those who follow Ms. Yang's WeChat Moments have noticed that she has been posting about her life lately, whereas before she mainly posted about work. What is your perspective on work-life balance?
Ms. Yang Xiaoxiong: Although each period has its own focus, I previously dedicated most of my energy to work, with less attention to my personal time. Now I have more free time, but I still keep an eye on company matters and continue to work on various things as usual.
Mr. Feng Bing: Different stages require different tasks. Mr. Yang is still the Chinese head of the China-Australia, China-New Zealand, and China-South Africa working groups. A group working meeting was held in Zhangjiagang last time. Please, Mr. Yang, introduce some of the situations in this regard.
Ms. Yang Xiaoxiong: The China-Australia, China-New Zealand, and China-South Africa working groups pay considerable attention to China's wool industry. As the founder of the Nanjing wool market and the initiator and Chinese head of the group, I will continue to do what I can in these areas. I will report to you on the dynamics of the foreign group members after they return and their written responses.
China-Australia Group Regarding the issue of Australian wool quality, Australian sheep breeds are constantly being crossbred, and it is inevitable that some coarser fibers will appear due to genetic influences. It is recommended that you try to purchase P-certificate wool for better quality assurance. AWEX has produced warning videos that are played repeatedly on various farms, and warning posters are distributed to each registered grader to prevent similar problems from occurring again.
China-New Zealand Group An article was written in the New Zealand Shepherd's Weekly in the name of the National Committee regarding shearing and sorting issues. This is a very weighty article, hoping that farmers will strengthen farm management. New Zealand's largest wool scouring factory, Woolworks, is also its biggest victim. Woolworks has set up an employee reporting system. When non-wool contaminants are found, they can be traced back to the specific farm, and Woolworks will reward employees. I went to Chairman Mao Zhengrong's factory this morning and found that their wool sorters were very meticulous. At the same time, the New Zealand group also issued relevant documents with the New Zealand Wool Industry Organization (Wool Impact) on wool quality issues, raising the sorting standards to allow farmers to control quality during shearing. The delay in shipping New Zealand wool is actually due to the floods, which resulted in insufficient scouring capacity. Woolworks expects that scouring factories will be fully operational during Christmas and New Year, and the problem of delayed shipment will be solved. At that time, New Zealand scoured wool may re-enter China in large quantities, which is a double-edged sword, for your reference only.
Secondly,
South Africa Group After returning, the members immediately held an industry meeting, reporting the complaints received at the September meeting to all relevant functional personnel, reminding everyone to attach importance to the Chinese buyer market and maintain the good reputation of South African wool in China. South Africa has entered the dry season, wool quality has recovered, the output of South African Merino wool will increase slightly, 30% of South African wool has achieved sustainable certification, 60% of Merino wool has achieved sustainable certification, and the proportion of electronic wool bales is increasing.
Mr. Feng Bing: Mr. Yang, what are your feelings about the wool industry this year? What are your expectations for next year?
Ms. Yang Xiaoxiong: This question is like drinking water—only you know whether it's hot or cold. As long as we persevere, the hope of the industry will always be ahead, and we will work together with you.
Song Tengfei: Australian/New Zealand Wool Sales Agent
Mr. Feng Bing: How do you view the recent rise in Australian wool prices?
Song Tengfei: The Australian wool auction prices have risen significantly in the past three weeks, mainly due to good demand and high transaction volume in the early stages, which has driven up prices.
The supply and demand relationship is divided into three parts: the first is the supply of brokers and the purchase of exporters at Australian auctions; the second is the supply and demand relationship between Australian wool exporters and those of us who buy wool; and the third is the supply and demand relationship between wool industry practitioners supplying wool tops or carbonized wool and downstream spinning or fabric enterprises.
Every time the price rises or falls, it's the addition and subtraction of these supply and demand relationships.
Mr. Feng Bing: In these few weeks, wool prices have risen, especially last week. Did your actual transaction volume increase, decrease, or remain flat? Because this affects future prices.
Song Tengfei: Prices have been rising for three weeks. In the first week, transactions were high, especially for tops. In the second and third weeks, although there were still transactions for tops, they were significantly lower than in the first week.
Mr. Feng Bing: Australia will close for the year around mid-December, with about three more weeks of auctions. How do you view the next three weeks?
Song Tengfei: On Thursday, Australia adjusted the listing volume for next week. I don't know if it will be adjusted again tomorrow. At least for now, foreign brokers think the current price is good and want to increase the supply and ship at this high point, but domestic buyers are generally not enthusiastic, and negotiations with foreigners are difficult. It is estimated that the auction price will fall slightly next week, but it will remain firm before the market closes.
Mr. Feng Bing: Hu Xuanxuan (Shanghai Ruitian Co., Ltd.) is also a wool supplier agent. Let's hear their views from the supplier's perspective.
Hu Xuanxuan: I think that when wool was difficult to sell in September, except for Tex, Fendjin, and PJ, other suppliers had already completed transactions for shipments from December to January and needed to replenish and load goods. Coupled with the purchases of large factories such as Tianyu that directly enter the market, this has provided some support to the market.
Mr. Feng Bing: This year, among the customers you have contacted or the customer groups that buy wool from you, which customers are relatively more difficult, and which types of customers are relatively better?
Song Tengfei: This year, if classified by the type of product operated by the customer, in terms of difficulty, it may be the most difficult to do fine-count carbonized wool this year, followed by fine-count short tops, coarse-count crossbred wool, fine-count long tops, and coarse-count carbonized wool. Coarse-count carbonized wool has less pressure and makes money, as do coarse-count long tops or carpet wool.
Mr. Feng Bing: Recently, New Zealand wool prices have been rising. You have also been an agent for a lot of New Zealand wool. Please introduce the recent demand situation for New Zealand wool products.
Song Tengfei: I think that the price of New Zealand wool rose rapidly in the early stages. In the first half of the year, most of the New Zealand wool was purchased by large factories making carpets. This year, more than half of the sales of New Zealand wool should have been purchased by carpet factories, while many enterprises in Jiangsu and Zhejiang did not buy much in the first half of the year, with only a few consistently purchasing.
Mr. Feng Bing: Now, there is a question. The demand for New Zealand wool has been good for a while. Do you think that downstream enterprises have a lot of New Zealand wool in stock?
Song Tengfei: I think that there are few finished products, very little wool top inventory, and very little raw material inventory. This New Zealand wool is all regular long wool, and some short wool is recently being used in quilt wool. I think the increase in demand is particularly obvious.
Mr. Feng Bing: Song Tengfei just mentioned three shortages. In addition to regular raw wool and scoured wool, New Zealand wool also includes some skin-clipped wool. Manager Li Guoqiang from Jiaozuo Longfeng Company is also here. Does your company have a lot of inventory of New Zealand wool, British wool, French wool, and other skin-clipped wool?
Li Guoqiang: For coarse wool, this winter has been somewhat warm, and our inventory has been almost completely sold. The first increase in volume is in carpets; after the reopening of tourism this year, there has been a significant increase in carpet demand. The second is in home products in northern China, especially wool blankets. From last year to this year, there has been a new change. Traditionally, our wool blankets were all produced in Nantong, but in the past two years, some small and medium-sized factories in the north, including some domestic brands, have rapidly emerged, and their demand has grown rapidly. The third area of increased demand is in clothing fabrics; these are the three main areas.
Qian Yaoyu: Chairman of Zhangjiagang Jinmeng Weaving and Dyeing Co., Ltd.
Mr. Feng Bing: The previous speakers mentioned coarse wool; Mr. Qian from Jinmeng focuses on fine-count wool. Their wool top production capacity is also continuously expanding. Mr. Qian, could you please talk about your company's current development status and give us an overview of the company's overall layout?
Qian Yaoyu: First, I want to discuss a rather serious topic. On the afternoon of October 25th, a fatal accident occurred at our wool scouring factory in Changzhou. I'm informing everyone of this situation as a warning. Safety in production comes first; we must cherish life. In addition to regular equipment maintenance, companies should also eliminate other potential hazards to prevent accidents.
Mr. Feng Bing: Mr. Qian reminds everyone that safety in production is paramount, especially given the safety incidents that have occurred during the development of enterprises. This is a problem for both people and the development of the enterprise. Next, let's have Mr. Qian introduce the current development status and layout of the enterprise.
Qian Yaoyu: Actual sales increased by 15% in the first half of this year, and have remained flat since June. This year, we have invested in a factory in Xiangshui, northern Jiangsu. The first phase includes two wool scouring lines and two mercerizing and shrink-proofing lines, all with brand-new equipment.
Mr. Feng Bing: Since Mr. Qian mainly serves clients in the fine-spun fabric sector, could you please introduce the current operating conditions of some of your clients, how they are doing this year, and their future plans?
Qian Yaoyu: When I first founded Jinmeng, I positioned the company to focus on fine-spun fabrics and fine-spun knitted yarns. The fine-spun industry has experienced three periods of significant growth. The first was in 2001, when China joined the WTO, and fine-spun fabrics were extremely popular. The second was in 2009 and 2010, when the government promoted several trillion yuan in development, and the economy initially boomed due to government orders. Most recently, in 2022, fine-spun factories were profitable.
The price increase of fine-count wool this year, I believe, is due to two reasons. One is that knitted yarns and fine-spun fabrics need to be ordered in November and December, coupled with government orders for uniforms from the railway system. Several of our clients are stocking up on materials because they won't have time to do so once the production season begins. This has led to price increases in several areas.
I think the future market for wool will likely see little change in the next three weeks. Next week, due to a larger volume of wool being listed and auctioned, there will likely be a price correction, but the adjustment will not be significant.
Mr. Feng Bing: Is your confidence for next year increased, balanced, or decreased?
Qian Yaoyu: I think it's relatively balanced. Even if the economy is poor, there will always be a floor, but there won't be explosive growth. We shouldn't be overly optimistic, nor overly pessimistic.
Ji Qianlong: Chairman of Zhangjiagang Yangzi Combed Wool Top Co., Ltd., Dr. Ji Qianlong
Mr. Feng Bing: Next, let's invite Dr. Ji Qianlong, Chairman of Zhangjiagang Yangzi Combed Wool Top Co., Ltd. We recently traveled to Australia and New Zealand with Chairman Ji. Someone asked me if Chairman Ji bought 1000 tons of wool. If convenient, could you introduce how much wool you bought and what kind of wool you purchased?
Ji Qianlong: This time, we organized members of our wool association to visit Australia and New Zealand to exchange ideas with overseas counterparts. Seeing friends I hadn't seen in years was exciting, so I bought some wool. Due to various reasons over the past two years, I've been focusing on coarse wool. This time, I bought a total of 900 tons of wool in Australia and New Zealand.
Mr. Feng Bing: This year has been challenging for coarse wool. Chairman Ji had two moments of joy. One was when he landed back in China after his trip to Australia and New Zealand. Upon checking his phone, he saw that both the exchange rate and wool prices had risen, and he said he had made money again. The second was in September and October, when sales of coarse wool were very good, marking a peak in sales.
Ji Qianlong: It was a small peak. This wave of coarse wool prices began after the International Wool Conference, with good demand, and I sold a lot of wool tops. This market situation also had a benefit for the industry: it completely cleared out some extremely cheap and low-quality coarse wool.
Mr. Feng Bing: This situation is beneficial to the industry. Mr. Zhou from Wuxi Xiangtai, do you have any questions about coarse wool for Chairman Ji?
Zhou Wentao: Chairman of Wuxi Xiangtai Textile Co., Ltd.
I'd like to ask Chairman Ji, you sold a lot of coarse wool this time, I heard you sold seven or eight thousand tons, did you make any money?
Ji Qianlong: That's a very professional question. As businessmen, we all want to make money.
Selling 7,000 tons of wool in this market is a bit of an exaggeration, but my entire inventory of wool tops is sold out; my wool top inventory is negative. As for whether I made money, I didn't. Why not? Because I had high-priced inventory. But there's also a benefit: this market situation cleared out my high-priced inventory, that is, the 56-count and 58-count coarse wool from Argentina, Uruguay, and Australia from three or four years ago. The pain is over, so I didn't make money, but I'm very happy. At the peak, I had 16,000 tons of wool. Many people asked me if I felt pressured. I said no, because 16,000 tons of coarse wool is equivalent to the inventory of 2,000 tons of fine-count wool held by Jinmeng or Tianyu. Because the price of coarse wool was so low, I didn't feel much pressure.
Mr. Feng Bing: Chairman Ji said that his current happiness doesn't lie in making money, but in reducing his burden.
Ji Qianlong: Yes, having a lot of wool on hand always makes one feel uneasy. When I see the report, the cost of 56-count Uruguayan wool is still 52,000, but now it only sells for around 24,000, it's always unsettling. Although I didn't make money, I finally got rid of this burden. I still have more than 10,000 tons of 56-count and 58-count wool. Why haven't I sold it? Because after the market started, our wool top inventory was limited, and most of our inventory was raw wool and scoured wool, and there wasn't enough time to process it into tops for sale. I can say that the good days of making money are coming soon. Any wool in the warehouse will make money if sold.
Mr. Feng Bing: In other words, if the price of coarse wool can maintain its current level or rise slightly, it means you'll start making money.
Ji Qianlong: Then we have to make money every day, we must make money. However, making money every day is also to make up for past losses. So, thinking about it, there is nothing to be particularly happy about. But I still want to emphasize one point, coarse wool has started to pick up. In the past, it usually took 3-5 years to cycle, but now it takes 5-8 years to start. Since it has started, as I mentioned at the Nanjing wool market conference, when a spring is compressed to 25 centimeters, it will rebound. Currently, it has rebounded to 35 centimeters, and it is also normal to rebound to 50 centimeters next. So I think that since the market has started, it is impossible for it to suddenly disappear completely after only three months. This is just the beginning. Chairman Mao said that a single spark can start a prairie fire. Now it is the beginning, the market has just started, I think the coarse wool market will not be very hot next year, but at least it should be relatively healthy.
Mr. Feng Bing: Another question, this time I went to New Zealand. Originally, Chairman Ji was the wool king of Uruguay, and later the king of Australian wool 56s and 58s. You just said you bought nearly 1,000 tons of wool. As far as I know, you also bought New Zealand wool. Are you also going to enter the New Zealand wool market, to make the coarse wool king bigger and stronger?
Ji Qianlong: This purchase of New Zealand wool was purely accidental. Because I met several executives from New Zealand wool washing plants at the Nanjing wool market conference, I told them that we were going to New Zealand, and they received us very enthusiastically. Our Xia Ri New Zealand Wool Company is still there, and we have basically been doing the supply chain for the New Zealand Merino wool market. I think what Song Tengfei said just now, the New Zealand wool market may still have opportunities next year, so we can do a little bit on the side, depending on the market situation, we will see how the New Zealand wool goes.
Mr. Feng Bing: That is to expand your varieties a little wider, and you will continue to participate in the fine wool market next year?
Ji Qianlong: I didn't used to do coarse wool. Looking back, the amount of fine wool we did was the largest among the companies present. We were once the main supplier of fine wool to Sunshine and Hailan. However, later, because my main focus was on real estate, I put aside fine wool for two years. But fine wool will definitely be done, gradually recovering to the previous state with the changes in market conditions. It is not normal for a factory like ours, Yangzi Wool Tops, to only do coarse wool. In the future, we will still do a balance of coarse and fine wool. I will not pursue being the wool king or the coarse wool king. I think we should still do business normally according to the market and the company's business, and not deliberately pursue doing coarse wool or fine wool.
Huang Yubing: General Manager of Jiangsu Jubai Wool Products Co., Ltd., Chairman of Nantong Hongyang Wool Felt Products Co., Ltd.
Mr. Feng Bing: It's not necessarily good to be too one-sided; what suits you is the best. Next, let's invite Huang Yubing, General Manager of Jiangsu Jubai, to speak. In June, General Manager Huang mentioned that carbonized wool is difficult to do, and it has been the most difficult to do in recent years. From the information we have received so far, the demand for New Zealand wool is reversing. Is it possible for carbonized wool to reverse in a positive direction in the future?
Huang Yubing: The difficulty of carbonized wool is still affected by market demand, and the overall demand for worsted fabric is relatively poor. Environmental problems, unstable raw material prices, exchange rate fluctuations, and safety production factors have put a lot of pressure on enterprises. For our processing plants, this year has been relatively busy, but more raw materials have come in, and fewer finished products have gone out. Looking at our warehouses, we know that there is a problem with demand. However, wool for quilts stands out, in short supply, because the small fragrant wind fabric made with New Zealand coarse wool has caused the price of Australian Downs quilt wool to rise by about 15%, resulting in lower profits for quilt wool. Therefore, today, big-name brands of wool quilts have also been invited to participate in the conference, with the aim of doing a good job in the wool quilt market, which has finally picked up, and not ruining it.
Mr. Feng Bing: What is the biggest pain point in the carbonized wool industry at present? Is it also a problem that processing fees are difficult to collect?
Huang Yubing: For carbonized wool, our biggest pain point is that the daily output is normal. Our three carbonization lines and one silk-gloss line are all running, so about 50 tons of finished wool comes out every day. Not all of it is shipped out, about 15-20% results in inventory backlog, and the raw wool keeps coming in slowly, and some raw wool is still not being processed. Although we say we have enough warehouses, warehousing also brings considerable cost pressure.
Mr. Feng Bing: General Manager Huang also has another identity, Chairman of Nantong Hongyang Wool Felt Products Co., Ltd. Please introduce your company. Your company is promoting machine-washable wool quilts. Why do you make machine-washable wool quilts? The cost is not cheap, and the market is not necessarily that big, right?
Huang Yubing: Hongyang was established in 1994, and next year will be its 30th anniversary. In the artificial fur industry, we are the only one specializing in pure wool. We are the first company in China to have a complete industrial chain for pure wool artificial fur products. Our main business is artificial fur, carbonization and whitening, supporting dyeing and finishing, and home finished products, forming a complete industrial chain. Every wool person says that wool is good, so I wonder why we don't use wool quilts? We have wool socks and wool underwear, so I started to develop wool quilts. Now our wool quilts are completely machine-washable. After washing, they are the same as before, with a rebound rate of over 90%, and 100% of the finished products are inspected and packaged after machine washing. They can be used directly without a quilt cover, ensuring the best affinity. If they get dirty, they can be put directly into the washing machine. Let all wool people enjoy the goodness of machine-washable wool quilts. Wool is our lifelong love, and as a wool person, I use machine-washable wool quilts.
Zhang Weixue: Procurement Manager, Zhejiang Xinao Textile Co., Ltd.
Mr. Feng Bing: Next, Zhang Weixue, procurement manager of Zhejiang Xinao Textile Co., Ltd., a downstream enterprise, will introduce their situation. Xinao is a listed company specializing in yarn. Manager Zhang is in charge of raw material procurement. Recently, wool prices have risen. As a purchaser, how do you feel?
Zhang Weixue: In the past few weeks, Australian wool auction prices have risen significantly, especially fine wool, which has basically exceeded one dollar. Our Xinao's procurement is planned according to the needs of production capacity and actual orders, basically balancing procurement. Therefore, this price increase will not have a great impact on us. This price increase has instead prompted our downstream customers to make some advance bookings with Xinao for next year.
Mr. Feng Bing: For Xinao, your downstream enterprises are instead willing to order some wool yarn in preparation for next year. Your raw material procurement is balanced, and you have been buying. So, this time the price has risen, will you slow down your raw material procurement, or will you continue to follow?
Zhang Weixue: Because the company's business policy is to promote sales through production, our procurement strategy is average procurement. Generally, we will not over-buy or short-sell.
Mr. Feng Bing: By this time next year, Xinao's production capacity will be further expanded, and the demand for raw materials and the scale of sales will also continue to expand. We also know that Xinao used to mainly produce knitted yarn, but now it has also entered the weaving yarn industry, and has also begun to enter products such as home textiles. Manager Zhang can also introduce the main fineness of the wool you use.
Zhang Weixue: Since a few years ago, our company, XinAo, has launched a broadband strategy, focusing mainly on industrial yarns and woven yarns. We are only just starting in this area. The micron range of wool raw materials for industrial yarns is between 35 and 19.5 microns, a wide range depending on the end use. The micron range for woven yarns is between 23.0 and 18.5 microns. Most of our knitting yarns currently use raw materials finer than 21.0 microns.
Mr. Feng Bing: You are also responsible for raw material procurement and have close contact with many of our downstream wool top factories. Recently, what are the requirements for wool top quality, and are there any issues?
Zhang Weixue: For raw material quality, we focus more on its stability, with fineness, whiteness, long fibers, and the content of colored fibers being our key concerns.
Mr. Feng Bing: Tianyu should be a supplier of XinAo, right?
Liang Liang: Vice President, Tianyu Wool Industry (Zhangjiagang Bonded Zone) Co., Ltd.
We have always been a supplier to XinAo, and the cooperation has been excellent. XinAo's expansion is beneficial to us and will drive our entire industry.
Mr. Feng Bing: What are your views and expectations for the wool industry next year?
Zhang Weixue: My personal view on the recent wool price increase is that, in addition to some slight changes in market demand, it is more of an expectation.
Gao Baolin: Chairman of Shanghai Zhonghao Knitting Co., Ltd.
Mr. Feng Bing: Chairman Gao Baolin of Shanghai Zhonghao Knitting, your company is a downstream enterprise specializing in socks. First, I would like to ask Chairman Gao, you just returned from the United States. Was it a market research trip?
Gao Baolin: I went to see my child, and also took the opportunity to look at the market.
Mr. Feng Bing: Your child is in the United States. Regarding consumption, what are your feelings about the consumer capacity of the US market or recent price levels?
Gao Baolin: The United States has been the engine of world economic development for the past 100 years. For a long time, wage income accounted for 50% of its GDP, now it's 65%. This year's GDP may reach US$28 trillion, with per capita income reaching US$80,000. In other words, with a population of 350 million, the US has wage income of 16 or 17 trillion US dollars, a very large economy. So, for an exporter, not doing business in the US market is equivalent to not doing export business. Since China joined the WTO, the US market has always been my largest market.
Mr. Feng Bing: How does your business in the US market this year compare to last year?
Gao Baolin: I'm in daily consumer goods, which have been growing for the past 30 years, including this year, especially wool products, so I came to this meeting today. Because Dr. Ji Qianlong has been telling me that there are many physical and chemical processing methods for wool now, especially mentioning a carbonization plant in Nantong, so I wanted to come and see.
Mr. Feng Bing: We also know that wool socks are more commonly used in Europe. Can you introduce the advantages and characteristics of wool and how to promote it to our customers?
Gao Baolin: The biggest advantage of wool now is that it's cheap, almost the same as polyester, so Chairman Ji said last year that wool is very cheap, as cheap as 22,000 yuan per ton, cheaper than acrylic, so we should use more.
Mr. Feng Bing: Then the question arises, if at some point, the wool that Chairman Ji mentioned rose to over 60,000 yuan, would you still use it?
Gao Baolin: I personally believe that it would take at least 5 years for wool to rise from 20,000 to 60,000 yuan.
Mr. Feng Bing: We've heard so many people talk about wool. Chairman Gao, what are your thoughts after listening?
Gao Baolin: I think wool is a good thing, especially when the price is low, similar to acrylic and polyester. Isn't that a good thing? Wool products sell well, and the price overseas can be doubled, and people don't even feel it.
Mr. Feng Bing: Those present, if you have any questions for Chairman Gao, please feel free to ask. We welcome Chairman Gao to join our wool circle and become a member of our big family. I suggest the chairman let everyone raise their hands to vote, welcoming Chairman Gao to join the Wool Association.
Ji Qianlong: Just now, everyone voted to approve Chairman Gao Baolin's membership and to make his company a vice-president unit of the Wool Association. We warmly welcome and congratulate Chairman Gao on joining!
Chairman Ji Qianlong finally summarized the wool salon meeting.
First of all, I would like to thank the secretary-general of our Wool Association for hosting this salon! Thank you all for coming to the meeting on a Sunday, including many friends from Beijing, Tianjin, and Zhejiang. Today's meeting was very good, and it should be considered a success. Everyone attentively listened to the presentations of the guests from beginning to end. At this meeting, we invited several guests who made careful preparations. Chu Jiewen from the International Wool Secretariat China office gave a very wonderful report on the new development trends of woven fabrics. General Manager Wu from Import Bao gave a report on digitalization from fiber to fashion. The highlight of each meeting is the easily understood analysis of the wool market and economic situation given by our teacher Feng Bing. The content of the three guests' speeches was very practical and specific, and I felt I gained a lot after listening.
Once again, on behalf of the Wool Association, I would like to thank those who came specially to be guests, including Song Tengfei, who gave us a presentation on the Australian and New Zealand market; Qian Yaoyu from Jinmeng, who talked about fine-count wool; Huang Yubing, who talked about carbonized wool; I myself introduced coarse-count wool; Zhang Weixue from XinAo, who talked about worsted yarns; Gao Baolin from Zhonghao, who talked about wool products; and Yang Xiaoxiong, the team leader of the China-Australia, China-New Zealand, and China-South Africa working groups, who introduced and explained some of the problems and contradictions in Australia, New Zealand, and South Africa, as well as some issues raised at the Zhangjiagang meeting of our three working groups.
This meeting was very successful, with rich content. I feel that this is the richest meeting the Wool Association has organized in several years.
Once again, I would like to express my heartfelt gratitude to Chairman Mao Zhengrong and General Manager Huang Yubing of Ju Bai for their careful arrangements for this meeting, which they have been preparing for nearly a month, and for their dedication to the successful holding of this meeting.
On behalf of the Wool Association and all the participants of the 41st Wool Salon meeting, I would like to express my sincere gratitude to the two general managers!
Finally, thank you to Director Ni from Tongzhou Bay for attending our meeting from beginning to end and providing guidance!
Finally, Secretary-General Xiao Jinwen announced: The 41st Zhangjiagang Wool Association Wool Salon has successfully concluded!
In the evening, Chairman Mao Zhengrong and General Manager Huang Yubing of Jiangsu Jubai Wool Products Co., Ltd. invited the guests to a welcome banquet and held a lottery draw.
