Prosperity Report Of China'S Cotton Textile Industry In September 2020: Steady Growth

In September, China's cotton textile boom index was 52.58. After half a year, it returned to above 50 of the Kuei Rong line again, and the industry's operation picked up significantly. In terms of raw materials, the prices of cotton and non cotton rose steadily this month, textile enterprises were more active in purchasing raw materials than last month, and the digestion speed of raw material inventory was accelerated. In terms of production, sales and inventory, the market environment improved this month, the startup rate of textile enterprises increased month on month, and the output of yarn and cloth increased; In terms of sales, the sales of all kinds of products are smooth, among which the regular medium and low count yarn products go faster, and the demand for grey cloth is growing; In terms of inventory, the speed of clearing the product inventory accumulated by textile enterprises in the early stage was accelerated, and the pressure on product inventory was reduced. In terms of price, affected by the rise of cotton price, the price of cotton yarn rose rigidly, but the price rise was not as large as that of cotton. The grey cloth did not keep pace with the rise, and the profit of textile enterprises was not effectively improved. The questionnaire survey of China Cotton Association shows that with the steady recovery of various economic indicators, the overall atmosphere of the market has warmed up, the downstream demand has begun to release, and the operating pressure of textile enterprises has eased compared with the previous period. Most textile enterprises are cautious and optimistic about the future market.

In terms of raw materials, after three months of orderly auction and storage, with the successful completion of the last round of reserve cotton rotation on September 30, 2020 will be a successful conclusion. The total listed sales of reserve cotton in this cotton rotation is 504000 tons, and the cumulative turnover is 503400 tons, with a turnover rate of 99.87%; The average transaction price is 11789 yuan/ton, which is 13099 yuan/ton at the standard (3128B) price. The highest transaction price is 13030 yuan/ton, the lowest transaction price is 10440 yuan/ton, and the average markup is 1036 yuan/ton. In general, under the influence of the continued global epidemic and Sino US economic and trade frictions, the demand for foreign trade market declined, and the deep development of the domestic market became the main goal of textile enterprises. With the adjustment of the domestic product structure, when the demand for low-grade cotton has increased significantly, the reserve cotton with high cost performance ratio has effectively filled the gap of cotton used by textile enterprises, reducing the cost of cotton use to a certain extent.

In terms of import and export, according to the import and export data released by the General Administration of Customs on October 13, the export growth rate in September 2020 was 9.9%, up 0.4% month on month. In September, the export of textile and clothing was 196.79 billion yuan (in RMB), up 14.5%, including 91.23 billion yuan (in RMB) of textile exports, up 33.4%, and 105.56 billion yuan of clothing exports, up 2.1%. In September, China's exports to the United States and ASEAN continued to grow, while its exports to the EU fell back, mainly because the European manufacturing industry recovered and the gap between supply and demand narrowed. As the risk of global epidemic spread has risen again recently, the pace of overseas resumption of work may slow down. It is expected that the import demand of overseas markets will be stronger in the short term, which will benefit China's foreign trade enterprises; At the same time, the recent second outbreak of epidemic in some countries may continue to drive the export of epidemic prevention materials.

Raw material purchase index

In September, the raw material purchase index was 54, the fourth consecutive month in the boom zone. With the improvement of the market atmosphere, downstream orders have increased, and textile enterprises have been more active in replenishing inventory, especially the cotton purchase volume, which has increased significantly month on month. In September, cotton prices both at home and abroad rose. The price of domestic cotton rebounded after a sharp fall, and the price center of gravity kept rising as a whole. The Cotbook A index fluctuated frequently. In terms of chemical staple fiber, the viscose staple fiber market has warmed up this month, and the quotation has been raised; The price of polyester staple fiber is basically in a weak decline this month due to the impact of the price decline of polyester raw materials caused by the intensified fluctuation of crude oil price.

Specific data: the average price of domestic 3128 grade cotton in this month was 12830 yuan/ton, up 225 yuan/ton month on month; The average value of the Cotbook A index was 70.81 cents/pound, up 0.86 cents/pound month on month; The average price of mainstream viscose fiber is 8844 yuan/ton, up 431 yuan/ton month on month; The average price of 1.4D direct spinning polyester staple was 5435 yuan/ton, down 37 yuan/ton month on month.

Raw material inventory index

In September, the raw material inventory index was 50.73, and the raw material inventory was at a reasonable level. In September, the market atmosphere was significantly warmer, the consumption of raw material inventory was accelerated, and textile enterprises were more active in replenishing the inventory. In addition, this month was the last month for the rotation of reserve cotton. In order to lock up cotton resources, textile enterprises actively bid, and the raw material inventory increased. According to the questionnaire of the China Cotton Association, 41.6% of the enterprises whose cotton inventory increased month on month in September and 30.71% of the enterprises whose cotton inventory decreased month on month; The proportion of enterprises whose non cotton fiber inventory increased month on month accounted for 33.58%, and the proportion of enterprises whose inventory decreased month on month accounted for 29.94%. Compared with August, the proportion of enterprises whose raw material inventory increased month on month increased significantly.

Production index

In September, the production index was 52.88, which accelerated the production pace of textile enterprises. In September, the startup rate of textile enterprises rose rapidly, and the output of yarn and cloth increased significantly, among which the enterprises whose output of cloth increased month on month accounted for 19.6 percentage points higher than that of last month. According to the coordinated investigation of China Cotton Bank, 49.17% of the enterprises whose yarn output increased month on month in September and 27.04% of the enterprises whose yarn output decreased month on month; The proportion of enterprises whose textile production increased month on month accounted for 58.45%, the proportion of enterprises whose production capacity decreased month on month accounted for 24.42%, the proportion of enterprises whose operating rate increased month on month accounted for 34.74%, and the proportion of enterprises whose production capacity decreased month on month accounted for 4.44%. Textile enterprises said that in September, the domestic grey fabric market began to recover. In addition, some overseas home textile orders were transferred to the domestic market, and downstream demand increased significantly. At present, the production is basically based on orders, with a small increase in the inventory of conventional varieties.

Product sales index

In September, the product sales index was 52.7, the second time in the year that it was in the boom zone. In September, the domestic market continued to recover and improve, with an increase in the number of orders, which was still dominated by "short, flat and fast" orders. The sales of high count yarn were significantly warmer, and the sales of grey cloth were significantly improved. According to the coordinated investigation of China Cotton Bank, 62.03% of the enterprises whose yarn sales volume rose month on month in September and 66.95% of the enterprises whose grey cloth sales volume rose month on month. Some textile enterprises said that there was a small increase in orders in Europe and the United States in early September, but with the increased risk of the global outbreak of a second epidemic, they were worried that orders would be cancelled again. In addition, the continuous appreciation of the RMB has also caused certain pressure on exports, and the sharp change of the exchange rate has squeezed the profits during the settlement of foreign exchange.

Product inventory index

In September, the product inventory index was 53.81, and textile enterprises' destocking accelerated. In September, the warmth of the market was transmitted to the upstream of the industrial chain, and the production and sales of textile enterprises were smooth, and the inventory accumulated in the early stage decreased significantly. From the perspective of variety, conventional combed yarn destocking is better than combed yarn products. As the sales of grey cloth is severely hindered in the early stage, and the product inventory base is large, the inventory pressure is still higher than that of yarn products. In addition, textile enterprises cautiously raised the startup rate to control product inventory. According to the coordinated investigation of China Cotton Bank, in September, the proportion of enterprises whose yarn inventory decreased month on month accounted for 59.82%, and the proportion of enterprises whose yarn inventory increased month on month accounted for 19.82%; The proportion of enterprises whose inventory of grey cloth decreased month on month accounted for 59.85%, and the proportion of enterprises whose inventory increased month on month accounted for 24.66%.

Business operation index

In September, the enterprise operation index was 51.34, and the operating income of textile enterprises increased significantly. In September, the prices of yarn and cloth rose steadily, mainly due to two reasons: first, the price of raw materials rose rigidly, and second, the market warmed up to raise the price of products. However, because the price of products rose less than the price of raw materials, the profit margin of textile enterprises was still at a low level. Some textile enterprises said that the orders in September were significantly improved, but the market competition was relatively fierce. In order to digest the inventory accumulated in the earlier stage, the goods were basically shipped at par, and the profit was unsatisfactory. According to the data from the coordinated inspection of China Cotton Bank, most enterprises said that their revenue increased significantly month on month, but their profit margin was low, and they basically maintained normal operation.

Enterprise confidence index

In September, the enterprise confidence index was 53.05, and textile enterprises generally held a cautious and optimistic attitude towards the future market trend. Some textile enterprises said that the current market is gradually warming up. Although the sales situation is not as good as that of the same period last year, the month on month ratio has improved significantly, which is a good thing for textile enterprises. At the same time, textile enterprises also have concerns. At present, market uncertainties are still prominent, so most enterprises still choose the business strategy of purchasing on demand and producing on order. With the approaching of "Double 11", Christmas, Spring Festival and other festivals, the international and domestic textile and clothing markets are expected to continue to recover. In addition, this year's strong cold winter is expected to also benefit the sales of winter clothing this year, and the downstream demand for cold protection products is expected to increase. With the steady recovery of the domestic economy, China's cotton textile enterprises will continue to strengthen their confidence, overcome difficulties and strive to improve the overall efficiency.

Note: The prosperity index of China's cotton textile industry is collected from nearly 500 secondary cotton textile enterprises in the country. Referring to the index formulation method such as the national manufacturing PMI, it is calculated by weighting several major indicators. When the index is higher than 50, it means that the prosperity of the cotton textile industry in this month is better than that in last month. If the index is lower than 50, it means that the prosperity in this month is less than that in last month.