In October, China’s cotton textile prosperity index was 53.58, and the industry’s prosperity continued to improve. In terms of raw materials, cotton and non-cotton prices have risen sharply this month. In order to control costs and the risk of raw material price fluctuations, textile companies tend to buy and use as they go, and non-cotton fiber purchases and inventories have increased month-on-month. In terms of production, sales and inventory, orders have increased significantly this month. Most textile companies are operating at full capacity. Products are sold as they are produced, and finished product inventories are at a low level. In terms of products, yarn sales are booming and output has increased significantly; gray fabric production and sales are not as popular as yarn. In terms of prices, yarn and cloth prices have risen rigidly this month along with raw material prices, but gray fabrics have not increased as much as yarns, and the profit margins of fabric companies have been compressed.
In order to fully understand the current operation of the cotton textile market across the country and enterprises’ forecasts of the market outlook, the China Cotton Textile Industry Association (hereinafter referred to as the China Cotton Textile Industry Association) has communicated with various cotton textile and industrial enterprises through Communicate information with downstream enterprises and track operation status in a timely manner. Judging from the survey results, the interviewed companies said that the market picked up significantly in mid-to-early October, orders increased significantly this month, and gradually returned to calm at the end of the month, with product inventories at a low level. Although profit levels still have a large gap compared with the same period last year, The situation is gradually improving. Some fabric companies said that without early low-price yarn inventory, the profit level of gray fabrics would be lower than last month. Regarding the market outlook, most textile companies said that there are still many uncertainties in the current international economic situation, coupled with the traditional off-season, and they are cautiously wait-and-see about the market outlook.
This month, short fiber futures were officially listed for trading on the Zhengzhou Commercial Exchange. Polyester staple fiber, the subject matter of short fiber futures, is one of the three major raw materials in the cotton textile industry along with cotton and viscose staple fiber. It is one of the main raw materials to ensure the development of my country’s textile industry. On the first day of trading, many short fiber futures contracts collectively hit the daily limit. Since then, they have risen for 6 consecutive trading days, and there have been 4 daily limit increases. Then the price began to correct sharply and fell to the limit on the 22nd. In the early days of listing, short fiber futures surged mainly because it coincided with the industry’s peak season, and the market concentrated on replenishing stocks. As market production and sales cooled, the market began to correct and recover from excessive gains.
In terms of import and export, according to data released by the General Administration of Customs, my country’s foreign trade import and export in October was 2.84 trillion yuan, an increase of 4.6%, achieving positive growth for five consecutive months. Among them, exports were 1.62 trillion yuan, an increase of 7.6%. Among them, the value of textile exports increased by 11.0% year-on-year. The continued growth of export trends is still determined by the recovery process of overseas economies. At present, the economic data of major overseas economies have improved, overseas import demand has expanded, and China’s exports have continued to expand. From the perspective of textiles and clothing, due to the second outbreak of the epidemic in some countries and regions, they have decided to close down the country and city. It is expected that consumption during the Christmas season will shrink. This news has affected the confidence of downstream stocking, and textile and clothing orders have dropped significantly. . In addition, the impact of anti-epidemic supplies on exports continued to decline that month.
1 Raw material procurement index
In October, the raw material procurement index was 55.85. This month, cotton prices at home and abroad showed a trend of first rising and then falling, and the overall price focus shifted upward. Taking into account the risks brought by cotton price fluctuations, textile companies are cautious in restocking cotton. At the beginning of the month, domestic cotton spot prices and Zheng cotton futures rose sharply, mainly due to the rush to harvest seed cotton by ginners after the holiday, which continued to push up the price of raw cotton. In addition, October is the traditional peak season for textiles, and the significant increase in downstream demand in the short term has also boosted cotton prices. In late October, the market gradually returned to calm, demand fell, and cotton prices fell. In terms of foreign cotton, the Cotlook A index rose slightly this month and then fell slightly. The increase was not as high as that of domestic cotton prices. In terms of chemical fiber staple fiber, the price trend of polyester staple fiber and viscose staple fiber this month is basically the same as that of cotton price. Price changes are mainly affected by changes in the market supply and demand pattern. Among them, polyester staple fiber futures have risen sharply since their listing, pushing up the spot price. Later, as the crude oil price fluctuated weakly in mid-to-late October and the demand side became saturated, the price entered a downward channel.
Specific data, the average price of domestic 3128 grade cotton this month is 14,699 yuan/ton, a month-on-month increase of 1,869 yuan/ton; the CotlookA index average is 75.95 cents/pound, a month-on-month increase of 5.14 cents/pound; mainstream sticky The average price of rubber fiber is 10,314 yuan/ton, a month-on-month increase of 1,470 yuan/ton; the average price of 1.4D direct-spun polyester staple is 5,808 yuan/ton, a month-on-month increase of 373 yuan/ton.
2 Raw material inventory index
In October, the raw material inventory index was 50.42, and the raw material inventory of textile enterprises was at a reasonable level. At the beginning of the month, the market atmosphere was hot and raw material prices were soaring. Textile companies, considering the risks brought by financial pressure and changes in raw material prices, still mainly buy and use as they go. As the market gradually cools down, the pace of production and sales slows down, and the inventory of raw materials increases. According to a survey by the China Cotton Industry Association, 33.94% of companies had a month-on-month increase in cotton inventory, and 36.94% had a month-on-month decrease; 38.91% of companies had a month-on-month increase in non-cotton fiber inventories, and 38.91% had a month-on-month decrease. than 27.42%. Compared with September, cotton fiber inventories decreased month-on-month, while non-cotton fiber inventories increased.
3 Production Index
In October, the production index was 53.96, with the operating rate and output increasing month-on-month. This month, the startup rate of textile companies has further improvedImprovement, yarn output increased significantly month-on-month, cloth output remained basically the same. According to a survey by the China Cotton Industry Association, the proportion of companies with a month-on-month increase in operating rate increased by 20.76 percentage points from the previous month, the proportion of companies with a month-on-month increase in yarn production increased by 5.49 percentage points from the previous month, and the proportion of companies with a month-on-month increase in cloth production slightly decreased by 0.43 percentage points. percentage point. The market improved rapidly in mid-to-early October, and product supply exceeded demand. Textile companies accelerated their production pace. Later, as downstream procurement became saturated, yarn prices linked to falling cotton prices and other factors, the market’s wait-and-see sentiment revived, and textile companies’ production pace slowed down. Some textile companies said that due to the recent significant increase in operating rates, labor is relatively tight.
4 Product Sales Index
In October, the product sales index was 56.86, and the market atmosphere was very hot. Downstream purchasing was active this month, and sales of yarn and gray fabric products were smooth. In terms of varieties, conventional yarns have been selling well, and the sales of high-count pure cotton yarns have also improved; the market for gray fabrics is not as good as the yarn market. Due to the large number of orders on “Double Eleven” and “Double Twelve” in October, the sales of thick and thick fabrics are better. Some foreign trade companies said that orders from Europe and the United States have not yet improved, and orders from Southeast Asia, Japan and South Korea have increased significantly. However, affected by the sharp fluctuations in raw material prices and the continued appreciation of the RMB exchange rate, textile companies are more cautious in accepting orders. Textile enterprises said that the hot market in October gave textile enterprises some breathing space, but the sustainability of this wave of market conditions is weak. It is expected that small orders may still be the main ones in the later period, and there will be greater resistance to another pick-up within the year.
5 Product inventory index
In October, the product inventory index was 55.4, and the inventory of textile enterprises decreased significantly month-on-month. There are two main reasons why product inventory this month is at a low level for the year: first, since September, product sales have been relatively smooth, and destocking has achieved results; second, the market recovery momentum has been good in October, with sufficient order volume, smooth shipments, and inventory accumulation. Basically cleared. Textile companies said that production and sales were smooth in mid-to-early October, and product inventories dropped significantly. From the middle to late half of the year, downstream follow-up orders have been weak, the market’s wait-and-see attitude has returned, and product inventories have begun to rise, but overall they are still at a low level. According to a survey by the China Cotton Industry Association, 72.79% of companies reported a month-on-month decrease in yarn inventory, and 66.07% of companies reported a month-on-month decrease in cloth inventory. The product inventories of textile companies have dropped significantly compared with the previous month.
6 Enterprise Operation Index
In October, the enterprise operation index was 52.63. The operating income of textile enterprises increased significantly and the profit level improved slightly. . The survey results of the China Cotton Industry Association show that 68.83% of the companies surveyed said that their main business income increased month-on-month, and the company’s share increased by 15.29 percentage points from the previous month; 42.02% of the companies surveyed said that profits had increased, and the company’s share increased from the previous month. 5.64 percentage points. Textile enterprises said that the sharp fluctuations in cotton prices that month had a greater impact on the orders received by textile enterprises. There is a partial profit for orders using cotton in stock in the early stage, and new orders will be adjusted based on the current cotton price. However, market acceptance is average, which indirectly affects the enthusiasm of downstream purchases.
7 Business Confidence Index
In October, the business confidence index was 49.7, and the market outlook is expected to turn dull. This month, the demand in the downstream market continues to increase significantly, the production pace of textile enterprises has accelerated, and cash flow has improved significantly. The recovery of the market has eased the operating pressure of textile enterprises. Regarding the market outlook, textile companies generally believe that downstream orders have decreased significantly since late October, and the industry peak season has come to an end. The end of the year is already a seasonal off-season. Coupled with the continued uncertainty of U.S. sanctions on Xinjiang cotton, recurring foreign epidemic situations, and unabated resistance to international economic improvement, the market is expected to have a higher probability of weakening in the later period.
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