In The First Half Of 2014, China'S Leather Industry Has Been Running Steadily And Steadily.

In the first half of 2014, although faced with many challenges such as the new macroeconomic norm, severe export situation, insufficient domestic demand, rising labor costs, environmental constraints and industrial restructuring, the trend of China's main leather industry was slow, stable, steady and steady. The future market is expected to continue to improve but there is still downward pressure.

　　 Downstream production benefits from export pull

Environmental protection Influence The output of light leather has declined since the beginning of last year, and has continued to decline since then. The largest decline was more than 30%. In the first half of this year, the national regulation of light leather production was 290 million square meters, down 1.6% from the same period last year. According to China's leather raw material price index, from the upstream raw material skin, the price index of domestic castrated cowhide has been rising all the way from the end of 2013, reaching the peak value of 107.4 in March this year, and then entered the downstream channel, and stabilized at the index level of 106. The stability of the price of leather products will help to slow down the production of light leather. In the first half of this year, the output of light leather increased by 18.2 percentage points year-on-year. It is expected that the output will go out of the decline in the second half of the year and rebound.

　　 Fur The industry has entered the turning point. According to China's leather raw material price index, the domestic fur price index in 2014 June was 58.9, compared with the peak value of July 2013 212.7, shrank by 72.3%. However, the growth rate of fur clothing in the lower reaches has not declined, but in the first half of 2014, China has regulated 2 million 124 thousand fur garments, an increase of 18.7% over the same period last year and a 24.7 percentage point increase in the growth rate. Meanwhile, the production of leather garments was 34 million 140 thousand in the same period, an increase of 3.8% over the same period, and the growth rate dropped 4.5 percentage points.

The slowdown in the output of leather clothing has both the negative impact of the upstream production decline and the drag on the export market. Exports in the first half of this year were 4 million 368 thousand, down 3.7% from the same period last year. Comparatively speaking, the acceleration of the output growth of fur clothing is mainly due to the pull of exports. In the first half of this year, China exported 579 thousand fur garments, worth 400 million US dollars, up 36.8% and 46.6% compared to the same period last year. According to the statistics of 17 leather and fur clothing enterprises from China Leather Association, the proportion of exports in the first half of the year was 22.3%, up 3.6 percentage points over the same period. The industry's dependence on exports is an important reason affecting the growth rate of leather garments and fur garments.

In the first half of the year, 2 billion 130 million pairs of leather shoes were produced in the whole country, an increase of 3.2% over the same period last year, and the growth rate was accelerated by 2.2 percentage points. The growth rate of leather shoes was also accelerated by the rapid growth of export volume. In the first half of this year, the export volume of leather shoes increased by 15.3% over the same period last year, compared with 3% in the same period last year.

　　 profit Growth is higher than sales revenue.

As the whole macro-economic growth is in the new normal, the downside risk is still large. In addition, the pulling effect of policy support on the investment growth of consumer goods industry is weakened, the investment confidence of enterprises is insufficient, the market demand is still weak, and the sales growth rate has slowed down. In 2014 1-6, retail sales of consumer goods totaled 124199 billion yuan, an increase of 12.1% over the same period last year, and the growth rate dropped 0.6 percentage points. Among them, the retail sales of clothing, shoes and hats and needle textiles totaled 588 billion 600 million yuan, an increase of 10% over the same period last year, down 1.9 percentage points from the same period last year.

China's regulation of the main leather industry is similar to that, the first half of the year completed sales revenue of 587 billion 380 million yuan, up 10.4%, the growth rate fell 0.7 percentage points. Fujian, Guangdong, Zhejiang and other traditional leather provinces still live in the top three, but their share has declined, especially in Zhejiang province. The growth rate of the leather industry is relatively low in recent years, showing a low single digit growth rate. The growth rate in the first half of this year is only 3.2%, the lowest growth rate in the top ten provinces and cities. It is worth noting that Sichuan, the central and Western leather Province, once ranked the top of the regional rankings, has dropped out of the top ten due to its continuous decline in sales revenue, down 5% compared to the same period in the first half of this year, because it accounted for 40.6% of the sales revenue in the western region, thereby slowing the growth of the region to 2.5%.

The gross profit of leather industry in the first half of the year was 36 billion 890 million yuan, an increase of 19.2% over the same period last year, and the growth rate was accelerated by 7.6 percentage points. There is a big difference between the profit area ranking and the sales income ranking, so we can see that the profit margins vary from place to place. The sales profit rate of the top five provinces with sales revenue was 10.2% in Henan, 9.2% in Hebei, 7.3% in Fujian, higher than the average level of 6.3% of the industry, and the profit margin of Guangdong and Zhejiang was only 3.1% and 4.2%, far below the average level of the industry.

As far as sub sectors are concerned, the footwear industry accounts for more than 50% of the total sales revenue and profits of the leather industry, compared with other sub sectors, its sales growth is low and profit growth is slightly higher. Since the beginning of this year, the whole shoe industry has achieved some success in inventory management, with a profit margin of 6%, even though it is still below the average level of the industry, but it has increased by 0.6 percentage points compared with that of last year, compared with a 0.3 percentage point decline in the same period last year. Besides the shoe making industry, the profit margin of leather and leather industry is also lower than the average level of the industry, while the sales profit margin of fur industry is still the highest, which is 9.2%, which has a significant effect on improving the profit rate of the industry.

　 Exports gradually weakened from weak to stable.

According to customs statistics, China's leather industry in the first half of 2014 was exported to US $39 billion 720 million, an increase of 5.7% over the same period last year, and the growth rate dropped 6.6 percentage points. Although the export of the industry is still on the low side, compared with the 0.5% growth rate in the first quarter, it has shown a positive signal from weak to stable and gradually warming. Taking into account the overall stability of the current international market, the industry's future export growth is expected to continue the current trend toward steady state and a slight rebound.

In the first half of the year, the three main export markets of China's leather industry were the United States, the European Union and ASEAN, accounting for 53.8% of the total. The share of European and American markets is evenly divided, but the US market has been growing slowly, with a slight increase of 0.8 percentage points over the same period. Exports to the European Union for the same period amounted to US $9 billion 30 million, an increase of 9.7% over the same period last year. The European and American markets continue to pick up, and the leading role of developed economies in global recovery is evident in leather industry exports. At the same time, the emerging markets are not performing well, especially in the ASEAN market. The main leather industry in China exported $2 billion 820 million to ASEAN in the first half of this year, an increase of 4.1% over the same period last year, while exports to ASEAN increased by 52.7% during the same period last year, while exports to ASEAN declined by 5.1% in the first quarter of this year. Besides ASEAN, China's exports to emerging markets such as Brazil and South Africa have also declined to varying degrees. In the emerging market, domestic demand is fragile and lacking stability. Under the influence of insufficient endogenous motivation, limited external demand and policy spillover of developed countries, the future development of emerging economies is difficult to pick up, and its export growth is limited.

In terms of regional exports, Guangdong, Zhejiang and Fujian accounted for 72.8% of the total exports, but the growth rate was slower. Especially in Guangdong and Fujian, the annual growth rate was only 3.2% and 0.2%. It should be pointed out that Xinjiang's export growth rate is as high as 92.8%. In the first half of this year, China's leather industry grew to 87.2% on the border with Kazakhstan, indicating that Xinjiang's leather border trade was developing rapidly.

As far as sub sectors are concerned, shoes are still the main force in the export industry, accounting for 61.7% of the total export volume, and the growth rate is as high as 12.2%, while the export of leather and products has decreased by 3.9% compared with that of the previous year. Because of its 35.4% share, the industry's export growth has been reduced to a certain extent.

Looking at the future economic situation, the "remanufacturing industrialization" strategy in developed countries is difficult to achieve substantive breakthroughs in the short term. Although developing countries have the labor cost advantage to undertake labor-intensive industrial transfer, China's leather industry has obvious comprehensive advantages, thus providing strategic space for the transformation and upgrading of the industry. At the same time, the improvement of external demand will be gradually transmitted to domestic demand. The industry is in the "window opportunity period" for the transformation and upgrading of foreign trade. Enterprises need to seize the opportunity, base themselves on the domestic market, constantly adapt to the needs of the international market, integrate modern technology, environmental protection, e-commerce and other factors, and constantly enhance the competitiveness of product export, thus promoting the transformation and upgrading of the industry's exports.