Cotton Textile Situation: Pre Holiday Production Slows Down When Resuming Work

According to the tracking data of the China Cotton Textile Industry Association in January 2020 (hereinafter referred to as China Cotton Association), the production of cotton textile enterprises has slowed down due to factors such as Spring Festival and epidemic situation.


Raw materials: purchasing, consumption decreasing, reusing enterprises mainly using stock.


In January 2020, tracking the reduction of raw material procurement by 20.65% was mainly due to the influence of Spring Festival factors, and the withdrawal of funds before the festival reduced procurement.


The raw cotton purchase volume of raw materials decreased by 26.48%. In January, the average price of domestic standard cotton was about 13650 yuan per ton, rising around 700 yuan per ton, showing a continuous upward trend since the fourth quarter of 2019. The purchase volume of imported cotton in the raw cotton decreased by about 56%. In January, the international cotton price A index averaged 79.07 cents / pound monthly, rising 4.3% compared with the previous month. It has been rising for five consecutive months. The price of 1% months is almost the same as that of domestic cotton. Recently, the State Council Tariff Commission issued a notice to eliminate the market purchase of tariff commodities for us and Canada. The products involved cotton that was not combed. It is estimated that later enterprises will increase the purchase of imported cotton according to their needs.


The purchase amount of non cotton fiber in raw materials decreased by 5.32%. In January, the average monthly price of polyester staple increased by 1.6%, while the average monthly price of viscose staple in January continued to decrease by 3.1%, which has declined for three consecutive months, with a total decrease of about 12%.


As of the end of January, tracking enterprise raw materials inventory increased by 5.06%. According to the recent investigation and analysis of the cotton textile enterprises that have resumed production and production, the demand for raw materials, logistics and capital and other factors are influencing the raw materials used by textile enterprises.


The production of gauze: slow production before the holiday, overcoming difficulties after the holidays and resuming work in succession


Tracking enterprise data shows that in January, the output of yarn and cloth decreased by 21.12% and 15.26% respectively, mainly due to the superposition of factors such as Spring Festival and epidemic situation, and the commencement time of enterprises was less than that of normal months. Compared with January last year, yarn production and cloth output decreased by 20.80% and 21.85% respectively, mainly due to the Spring Festival in early February and a normal month in January. By the end of January, the utilization rate of spinning and weaving equipment was 91% and 86% respectively.


As of February 18th, the proportion of spinning and weaving enterprises tracking enterprises started last month accounted for 40% and 60% respectively. Most enterprises do not have new orders to produce conventional products or pre - season orders. Individual enterprises are fully ordered before the holidays, and they work earlier to resume delivery.


According to the survey, there is a big difference in the level of capacity recovery after the resumption of labor, and the productivity recovery rate of employees in the local or surrounding areas is relatively high. Some areas are still in a closed state, and traffic congestion is hindered. At the same time, there are still problems such as masks, inadequate supplies and difficult procurement, and the pressure of epidemic prevention and control.


Gauze sales: sales ring decreased substantially, inventories increased slightly.


Tracking business data shows that in January, sales of yarn and cloth decreased by 34.35% and 28.14% respectively. The monthly average price of pure cotton yarn was basically stable in that month, and the average monthly price of polyester staple yarn increased marginally. The average monthly price of viscose staple yarn decreased slightly, and the price of imported yarn increased steadily. As of the end of January, yarn inventory increased by 8.12%, and cloth inventory increased by 1.88%. Enterprises anticipate that the market will be ready after the Spring Festival. Affected by the epidemic, the downstream market has not started yet after the festival, and there are few sales of reopening enterprises, increased inventory pressure and tight capital turnover.


Industrial Clusters: cluster government helps enterprises orderly return to work


According to the investigation of the cluster situation, the current cluster enterprises are under construction due to the epidemic situation. The resumption of work in different clusters is different. Most cluster enterprises begin to resume work in February 15th or so, and the commencement time of clusters in areas with relatively serious epidemic situation and surrounding areas is expected to be after March. As of the 18 day, the clusters that had already resumed work were mainly leading enterprises with relatively large scale, and small businesses in the cluster started relatively few, with an average operating rate of less than 40%.


Enterprises in the cluster mainly rely on small and medium-sized enterprises, and it is more difficult to return to work. The clustered government actively takes measures to introduce relevant policies to help enterprises orderly return to work, lighten their burdens and tide over difficulties. It is understood that in order to reduce the spread of the epidemic, traffic restrictions in various regions have become one of the major difficulties for employees to resume work. Some clustered governments have organized shuttle buses to pick up the returning workers to solve the problem that employees can not return to the factory. The shortage of epidemic prevention materials and the difficulty of procurement are also one of the difficult problems for enterprises to return to work.


The data of this report are all derived from the China Cotton Textile Industry Association, involving more than 60 cotton textile enterprises and some cotton textile industrial cluster data, which are representative for reference.


This report is strongly supported by the Zhengzhou Mercantile Exchange.