August 2019 China Cotton Textile Industry Boom Report

In August 2019, China's cotton textile prosperity index was 45.91, down 0.34 compared with July. In the early August, Sino US trade relations deteriorated further, and market pessimism rose again. Cotton and chemical fiber prices have dropped, and the turnover rate of cotton reserves has dropped sharply compared with July. At the end of August, with the coming of "golden nine silver ten", downstream orders gradually improved, and enterprises gradually increased raw material inventory and increased production, so as to make adequate preparations for subsequent orders. However, due to the high inventory of products in the early stage, the price of gauze is still short of rising support, maintaining a decline, and there is no obvious sign of the peak season. The Sino US economic and trade consultations have gone through several ups and downs. Recently, China and the United States have agreed to hold the thirteenth round of high-level Sino US economic and trade consultations in Washington at the beginning of October. In addition, both sides have released some positive signals and confidence in the market has recovered. It is expected that China's cotton textile prosperity index will rise slightly in September.

　　 Raw material purchase price index

In August, the purchasing price index of raw materials was 46.96, down 0.35 compared with July. At the beginning of August, Trump declared that it would impose a 10% tariff on 300 billion US dollars in China's exports to the United States, causing market volatility. Then, China responded, and temporarily excluded the import tariffs when purchasing new US agricultural products after August 3rd. The domestic and foreign cotton futures and spot prices have dropped sharply, although the price of the US and Canada has been postponed and cotton prices have risen, but the monthly average price has dropped sharply compared with July. In terms of data, the average CotlookA index is 70.78 cents / pound, a decrease of 4.76 cents / pound, and the average spot price of domestic 3128B grade cotton is 13043 yuan / ton, a decrease of 888 yuan / ton. Viscose staple fiber is affected by the market slack, and the price continues to decline. Polyester staple fiber fluctuates more frequently under the influence of raw material PTA, but it is in a downward trend overall. In August, the average price of mainstream viscose fiber was 11288 yuan / ton, a decrease of 565 yuan / ton, 1.4D straight spinning polyester short average price of 7212 yuan / ton, a decrease of 900 yuan / ton. At present, the average price of CotlookA index and polyester staple fiber has increased slightly compared with August, but the average price of grade 3128 cotton and mainstream viscose staple fiber is still lower than that of August. Therefore, it is estimated that the probability of raw material purchase price index increase little in September.

　　 Raw material inventory index

In August, the stock index of raw materials was 47.22, an increase of 1.11 compared with July. Through China Cotton Association Research and understanding, in August, cotton stocks increased by about 42%, about 33% of the total, and about 47% of the total stocks of chemical fiber staple stocks, accounting for about 36% of the total. In August, the number of new orders in textile enterprises was not large, and the turnover rate of reserve cotton was reduced by the aggravation of Sino US trade relations. With the slight rise of raw material prices in the middle and late days, and with the partial "double eleven" order being gradually launched, enterprises should increase raw material procurement and increase raw material inventory. As the new cotton market is coming near, the market supply of cotton is adequate, and the purchase price of new cotton is lower than that of last year. Therefore, the increase of cotton stocks in enterprises is not high. According to the data of the China Cotton Association, the raw cotton inventory of enterprises increased by 0.72% in August. In September, the market in some parts of the market was warmer, the operating rate of enterprises increased, and the consumption rate of raw materials increased. It is estimated that the raw material inventory index may rise in September.

　　 Production index

In August, the production index was 45.88, an increase of 0.72 compared with July. Research shows that in August, the output increased by about 49% compared with that in July, while about 40% of the enterprises were flat, and only 11% of the enterprises with reduced production. Large and medium-sized enterprises have basically maintained normal operation and full load production. Small businesses have relatively few customers due to their small customer resources, and the start-up situation is relatively poor. Judging from the varieties, the market demand for conventional yarn is slightly better than that of high count combed products. Therefore, the production of conventional cotton products is relatively good. Tracking enterprise data shows that yarn production increased by 1.34% in August, and cloth production increased by 1.80%. In September, although the peak season phenomenon was not obvious compared with the past, compared with the previous months, the number of enterprise orders increased slightly, and the operation situation has improved greatly. It is expected that the production index will increase in September.

　　 Product sales index

In August, the product sales index was 44.36, down 0.63 compared with July. In the first ten days of August, the price of cotton and cotton yarn fell sharply, and the downstream orders were weak. The price competition of conventional varieties was bigger, and the confidence of textile enterprises was not enough. In the last ten days, the cotton yarn market has been improving, especially the air spinning line. Weaving shop sales pressure is still relatively large, orders less, continuous price reduction, only a small number of enterprises have sufficient orders, but the lack of follow-up orders. In terms of price, the average price of 32 pure cotton combed yarns is 20560 yuan / ton, a decrease of 433 yuan / ton, and the average price of pure cotton grey fabric (32*32 130*70 2/1 47 "twill") is 5.17 yuan / meter, and the ring ratio is 0.04 yuan / meter. Entering the market in September, the market was slightly "warming up". But early spinning enterprises have higher inventory and product price competition is still fierce.

　　 Product inventory index

In August, the product inventory index was 45.2, down 0.31 compared with July. In August, the market enquiry quotations increased, but the actual transaction orders did not improve significantly, some factories continued to increase the number of inventories, coupled with the price of raw materials downward, the prices of products continued to decline, even if the factory intends to reduce prices and clear inventory, but the downstream orders have not increased significantly. Especially in weaving mills, orders are mainly small batch orders, and subsequent orders are insufficient, and inventory pressure is still relatively large. Investigation and understanding, in August, product inventory increased by about 61% of enterprises, accounting for about 33% of the total, accounting for 6% of the decline. Among them, the inventory of weaving mill increased more than that of cotton mill, especially cotton fabric inventory increased most obviously. Tracking enterprise data shows that the inventory of pure cotton cloth increased by 2.12% in August. In September, Sino US trade relations were briefly eased, and the market was slightly warmer. For textile enterprises, "golden nine silver ten" will be an important opportunity for shipment this year, and most enterprises will intensify their efforts to clear up their stocks.

　　 Business index

In August, the business index was 45.68, down 0.34 compared with July. In August, the prices of raw materials and products dropped sharply, and the main business revenue declined. Research and understanding, loss making enterprises accounted for about 65%. Compared with the spinning enterprises, the efficiency of some weaving enterprises has been greatly affected. The main reason is that the downstream demand has not really recovered, and the price of cotton fabric has continued to decline, with less liquidity and greater pressure. On the staff side, some enterprises stabilize employees and maintain production by increasing vacation time, so employees are basically stable. Enterprises said that at present, under the support of "double eleven" orders, the market was slightly warmer, but the stamina was not enough. About 41% of the enterprises were optimistic about the market outlook. 33% of the enterprises thought that the possibility of market change was relatively small, and 26% of the enterprises believed that the market will continue to decline in the future.

　　 Description: China's cotton textile industry boom index is collected from more than 200 cotton spinning enterprises in the whole country. Through the weighted calculation of several main indicators, when the index is higher than 50, it indicates that the cotton textile industry is in a good condition, and below 50 indicates that the economic level is not good enough.