October 2019 China Cotton Textile Industry Boom Report

In October 2019, China's cotton textile prosperity index was 46.21, down 0.16 compared with September. On October 10th -11, the thirteenth round of the Sino US high-level consultation on economic and trade concluded, making substantial progress and restoring market confidence. With the coming of "double eleven", "double 12" and "Christmas", textile enterprises reflect the increase of enquiries in the lower reaches, and the order has changed. But for a long time, the market is cold again. In order to reduce the stock of gauze as soon as possible, enterprises concession out of the warehouse, the price of gauze has lost the support of rising, and continued to decline. Textile enterprises' profits have been continuously compressed, and the operating pressure has been highlighted. At the end of October, Chile cancelled the APEC meeting. The time and location of the signing of the agreement between China and the United States became confusing, and the uncertainty of the macroeconomic environment increased again. Recently, the policy of circular entry of cotton reserves was officially announced, and the textile enterprises responded well, all of which indicated that they were in line with market expectations and had a positive impact on the market. In recent years, the main task of cotton textile enterprises is to stock and return funds.

Raw material purchase price index

In October, the purchasing price index of raw materials was 45.76, down 0.17 compared with September. In October, cotton prices at home and abroad showed an overall upward trend. Under the influence of China agreeing to buy farm products from 40 billion to 50 billion US dollars from the United States, foreign cotton prices rose sharply, and domestic cotton prices also rose under the influence of new cotton production. However, because of the low base, the average price of domestic cotton in October was slightly lower than that in September. Specific data, the average CotlookA index is 73.80 cents / pound, a rise of 2.48 cents / pound; the average spot price of domestic 3128B grade cotton is 12647 yuan / ton, a decrease of 112 yuan / ton. Viscose staple fiber prices remained stable in the first half of the year. In the late part of the year, due to some factory overhauls, the starting rate fluctuated, and the quotation was raised. Polyester staple fiber prices are showing a downward trend, mainly for two reasons: first, polyester raw materials continue to decline, and two is downstream demand downturn. Specific data, the mainstream viscose fiber average price of 10720 yuan / ton, a decrease of 31 yuan / ton; 1.4D direct spinning polyester short average price of 7087 yuan / ton, a decrease of 268 yuan / ton. In November, the price of cotton was opposite to that of chemical fiber staple.

Raw material inventory index

In October, the stock index of raw materials was 46.01, down 0.31 compared with September. The main reasons are: first, domestic cotton is listed in succession, the domestic market is abundant in cotton resources, and the textile enterprises are not willing to make up the storehouse; two, the new cotton indexes are all lower than that of last year; the textile enterprises do not dare to purchase large quantities of raw materials; three, the internal and external cotton prices are upside down, and the import of cotton decreases; according to customs data, in October, China imported 70 thousand tons of cotton, a decrease of 12.5% compared with that of the chain; four, the price of polyester staple fiber continued to fall, and the psychology of buying up and buying down made textile enterprises not strong enough; five, the consumer side continued to slump, the enterprises did not have much new orders, and the amount of raw materials consumed was reduced. At present, the supply of raw materials is still sufficient, and downstream demand has not improved significantly. The announcement of the policy of cotton reserve rotation has a higher demand for cotton quality. It is expected that cotton textile enterprises will increase the purchase of high quality cotton in November.

Production index

In October, the production index was 46.18, down 0.11 compared with September. In October, affected by the National Day holiday, the overall production days of cotton textile enterprises decreased compared with that in September, and the operating rate decreased slightly. The production of enterprises is basically based on orders, and the output of yarn is slightly higher than that of September. However, the increase is not large, and the output of grey fabrics is decreasing. The main reason is that the inventory of textile mills is higher than that of cotton mills, and the pressure of destock is relatively large. Tracking enterprise data showed that 10 yarn production increased by 0.57%, and cloth production decreased by 5.85%. At present, the order of cotton mill in some areas is increasing. The order of the conventional varieties of the weaving mill is relatively stable. Some enterprises say that the downstream market is generally in general, and it is expected that the Spring Festival holiday will be ahead of schedule this year.

Product sales index

In October, the product sales index was 45.64, down 0.45 compared with September. Overall sales in October were not as good as in September. In the first ten days, most enterprises were in a state of holiday. The overall market situation changed little, the trading atmosphere was relatively stable, and prices remained stable. In the middle of the year, Sino US trade negotiations released good news, market confidence recovered slightly, cotton prices increased, and cotton prices rose to stimulate downstream demand. Some enterprises reported that they had improved. In the last ten days, the overall shipment of the cotton yarn market was stable and the price remained stable. Weaving factories mainly focus on stock elimination, and prices are stable and weak. Specific data show that the average price of 32 pure cotton combed yarns is 20126 yuan / ton, a decrease of 47 yuan / ton, and the average price of pure cotton grey fabric (32*32 130*70 2/1 47 "twill") is 4.88 yuan / meter, and the decrease is 0.08 yuan / meter. At present, the market is relatively stable, and the overall production and sales are good. Enterprises are actively seeking long lists, and quotations are mainly based on stability.

Product inventory index

In October, the product inventory index was 46.78, an increase of 0.1 compared with September. In October, as a traditional textile peak season, cotton textile enterprises did not appear in the past hot spots. In the early years, due to the accumulation of inventory, the annual closing is approaching. Enterprises are stepping up their efforts to inventory, especially weaving mills. The stock level of the cotton mill is slightly lower than that of the weaving mill. Investigation and understanding, cotton mill inventory in about 15-30 days, weaving mill inventory in 1 months or so. Tracking enterprise data showed that yarn inventory increased by 0.26%, and cloth inventory ratio decreased by 1.38%, especially cotton fabric inventory decline was more obvious, the ratio fell by 1.9%. Recently, most textile enterprises have begun to set up annual leave before and after new year's day.

Business index

In October, the business index was 46.74, down 0.08 compared with September. In October, downstream demand did not improve, and the price of gauze continued to decline. In order to reduce inventories and increase working capital, enterprises reduced their profits and profits. Some enterprises reflected that because of the decline of market, dealers appeared "run away" phenomenon, which led to more difficult days for textile mills. At present, Sino US trade negotiations are continuing. Whether China and the United States can sign the agreement smoothly is still unknown. Xinjiang cotton has a "double drop" in terms of output and quality, which will have a certain impact on cotton textile production. Although enterprises say that the reserve cotton rotation will have a positive impact on the market, the most important factor affecting the market is downstream demand. Therefore, the pressure on cotton textile enterprises in the short run is still greater.

Description: China's cotton textile industry prosperity index is collected from more than 200 cotton textile enterprises in the whole country. Through the weighted calculation of several main indexes, when the index is higher than 50, it indicates that the cotton textile industry's prosperity is better, and less than 50 indicates that the economic level is not good.