China’s Cotton Textile Industry Prosperity Report in April 2021
In April, my country’s economic performance was stable and improving, and the national economy continued to stabilize and resume development. From an industry perspective, production has increased steadily, market sales have weakened, product inventories have increased slightly, and corporate operations have generally remained stable.
In April, China’s cotton textile prosperity index was 49.20, a decline from March. From the perspective of sub-indexes, except for the production index and business confidence index, which are in the expansion range, the raw material procurement index, raw material inventory index, product sales index, product inventory index, and business operation index are all below the boom-and-bust line.
Raw material procurement index
In April, the raw material procurement index was 47.65, a decrease of 5.45 from March. From the market price point of view, under the influence of the Federal Reserve’s continued loose monetary policy and weather and other factors, cotton prices at home and abroad rose sharply and then fell back. The average CotlookA index for the month was 90.73 cents/pound, down 0.72 cents/pound from the previous month. The average price of grade 3128 cotton was 15,563 yuan/ton, down 409 yuan/ton from the previous month; in terms of chemical fiber staple fiber, The price of viscosestaple fiber showed an overall downward trend, and the price of polyesterstaple fiber fluctuated slightly within the range. The average price of mainstream viscose fiber that month was 14,925 yuan/ton, a month-on-month decrease of 664 yuan/ton; the average price of 1.4D direct-spun polyester staple was 6,779 yuan/ton, a month-on-month decrease of 479 yuan/ton. Judging from the purchasing situation of cotton spinning enterprises, the purchasing situation of cotton is slightly better than that of non-cotton fiber. Specifically, the cotton purchasing volume index is 47.47, and the non-cotton fiber purchasing volume index is 46.64.
Raw material inventory index
In April, the raw material inventory index was 48.67, a decrease of 1.52 from the March index. Domestic cotton supply was relatively sufficient that month, and cotton spinning companies basically needed to purchase. The price of raw materials rose rapidly in the early stage, and some companies believed that it was artificially high. Coupled with the gradual weakening of downstream demand, the market had a strong wait-and-see sentiment. Raw materials mainly consumed early inventory, and the overall inventory fell compared with March. According to survey data from the China Cotton Textile Industry Association (hereinafter referred to as the “China Cotton Textile Industry Association”), in April, the proportion of companies with declining cotton inventories was 43.48%, which was 15.67 percentage points higher than the proportion of companies that increased; non-cotton fiber inventories The proportion of companies that declined month-on-month accounted for 41.21%, which was 11.03 percentage points higher than the proportion of companies that increased.
Production Index
In April, the production index was 50.17, which was in the expansion range, but the index value dropped by 4.44 from March. According to the survey, except for some companies that produce pure cotton products, which slightly lowered their operating capacity, most cotton textile companies started normally and were basically producing at full capacity that month. Survey data shows that the proportion of companies with an increase in operating rate month-on-month is 12.4%, which is 2.1 percentage points higher than the proportion of companies with a decrease; in terms of output, gauze production has increased month-on-month. Overall, the month-on-month increase in yarn production is slightly higher than that of cloth production. According to survey data, 32.59% of the companies experienced a month-on-month increase in yarn production, which was 1.83 percentage points higher than the proportion of companies that declined. 33.01% of companies experienced a month-on-month increase in cloth production, which was 0.66 percentage points higher than the proportion of companies that declined.
Product sales index
In April, the product sales index was 47.39, a decrease of 5.75 from the March index. From the perspective of market prices, cotton yarn prices continued the downward trend at the end of March in mid-to-early April and began to rebound slightly in the second half of April. Gray fabric prices remained basically stable in the middle to late days after falling in the first half of April. Specific data, the average monthly price of 32-count pure cotton carded yarn is 24,314 yuan/ton, a month-on-month decrease of 937 yuan/ton, a decrease of 3.7%, and the average monthly price of pure cotton gray fabric (32*32 130*70 2/1 47″ twill) is 5.91 yuan/ton, a month-on-month decrease of 0.15 yuan/meter, or 2.48%. From the perspective of orders, according to the survey, orders from spinning companies have basically remained stable, and orders from some companies can be scheduled to July-August; new orders from weaving companies have slightly increased decrease, orders can basically be scheduled to June-July. Survey data shows that the proportion of companies with a month-on-month decrease in yarn sales is 41.71%, which is 4.77 percentage points higher than the proportion of companies with an increase. The proportion of companies with a month-on-month decrease in cloth sales is 51.65% %, 21.01 percentage points higher than the proportion of rising companies.
Product inventory index
In April, the product inventory index was 49.71, a decrease of 1.05 from the March index. During that month, production and sales in the domestic market were basically smooth, while foreign trade orders were hampered by the epidemic and shipping and other issues. Judging from the survey, the inventory of spinning enterprises is still at a low level, basically staying within 1 month; among weaving enterprises, the inventory of those producing conventional products has increased slightly, basically staying at 1-1.5 months. Survey data shows that 39.85% of companies have experienced a month-on-month decrease in yarn inventory, which is 4.13 percentage points higher than the proportion of companies that have increased. 46.37% of companies have experienced a month-on-month increase in cloth inventory, which is 13.47 percentage points higher than the proportion of companies that have decreased.
Business operating index
In April, the business operating index was 48.77, a decrease of 3.2 from the March index. In that month, gauze prices fell, product shipments slowed down, sales dropped, and the main business income of cotton textile companies declined month-on-month. Survey data shows��The proportion of companies whose main business income decreased month-on-month was 41.85%, which was 2.27 percentage points higher than the proportion of companies that increased. In mid-to-late April, upstream cotton prices rebounded slightly. Although gauze prices followed suit, terminal acceptance was not high and it was difficult to transmit. The profits of cotton textile companies were squeezed. According to survey data, the proportion of companies with a month-on-month decrease in total profits was 52.64%, which was 22.33 percentage points higher than the proportion of companies with an increase.
Business Confidence Index
In April, the business confidence index was 51.06, an increase of 2.89 from the March index. That month, the Federal Reserve continued to implement loose monetary policies, causing asset prices to rise significantly faster than the recovery of the real economy, and the global economic recovery was full of uncertainty. The epidemic broke out again in India, and textile orders returned to the country. Most companies believe that the market will pick up briefly in the later period. Domestically, the economy is recovering steadily, market consumption continues to recover, some companies are optimistic about the current market conditions, and investment confidence has increased. According to survey data, 31.02% of companies believe that the market outlook is optimistic about the future, and 20.46% believe that the market outlook will be weak and downward.
Note: China’s cotton textile industry prosperity index is collected from nearly 500 cotton textile enterprises across the country. It is calculated by weighting multiple major indicators with reference to the national manufacturing PMI and other index formulation methods. When the index is higher than 50, it means that the cotton textile industry The current month’s prosperity is better than the previous month’s. If it is below 50, it means that this month’s prosperity is not as good as the previous month’s.
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