Monthly Report on Production Analysis of China's Cotton Textile Industry in January 2021

Update:18 Mar 2021
Summary:

According to tracking data from the China Cotton Textil […]

According to tracking data from the China Cotton Textile Industry Association, in January 2021, affected by the Spring Festival holiday, cotton textile production and sales have declined month-on-month, but the overall market performance is better than the same period last year, and the inventory of gauze is at a low level.
Raw materials: increased procurement and inventory consumption decreased
In January, the purchase of raw materials by tracking companies increased by 5.45% from the previous month. The purchase of raw cotton increased by 9.09% month-on-month; the purchase of imported cotton increased by 25.16% month-on-month. This was mainly due to the narrowing of the price difference between domestic and foreign cotton, and the higher requirements for cotton use by downstream customers, especially export orders, and textile enterprises’ demand for foreign cotton purchases Increase; non-cotton fiber purchases decreased by 2.27% month-on-month.
The consumption of raw materials decreased by 3.08% month-on-month. The raw material inventory increased by 13.95% month-on-month, an increase of 13.66% compared with the same period last year. Among them, raw cotton inventory increased by 17.51% month-on-month, and non-cotton fiber inventories increased by 5.75% month-on-month. The main reason is that textile enterprises stock up in advance before the Spring Festival, and the purchase of raw materials has increased. During the Spring Festival holiday, the output of products has decreased and the consumption of raw materials has decreased.
Production: The equipment utilization rate was significantly higher than that of the same period last year.
In January, the yarn and cloth output of tracking companies decreased by 1.85% and 12.23% month-on-month, respectively, and increased by 38.29% and 17.84% year-on-year. The main reason is that January 2020 coincides with the Spring Festival, and the state advocates local production in 2021. During the New Year, the operating rate of enterprises has increased.
The utilization rate of spinning and weaving equipment was around 95%, an increase of 6.37% and 8.41% respectively over the same period last year. The utilization rate of weaving equipment is slightly higher than the utilization rate of spinning equipment. Among them, 75% of the companies with a utilization rate of spinning equipment higher than 85%, a decrease of 13 percentage points from the previous month; companies with a utilization rate of more than 85% of the weaving equipment accounted for This is 76%, a decrease of 5 percentage points from the previous month.
Sales: Sales of gauze fell month-on-month Inventories remained low
In January, the sales volume of tracking enterprise yarn decreased by 20.04% month-on-month, and the sales volume of cloth decreased 19.69% month-on-month. As the Spring Festival approached, the market trading atmosphere gradually slowed down. At the beginning of the month, market purchases and sales were booming. At the end of the month, with the increase in downstream holidays, logistics was gradually suspended, and transactions declined significantly.
Yarn inventory increased by 2.64% month-on-month, and cloth inventory decreased by 1.86% month-on-month. The overall market situation in January was relatively good. Purchases and sales slowed down at the end of the month. Yarn inventories rose slightly, but they were still at a low level. The decline in inventory of weaving enterprises was related to the decrease in output.
Operation: Loss continues to narrow and profits are gradually increasing
Tracking corporate losses are approximately 19%, which is 6 percentage points less than the previous month; export delivery value increased by 6.38% year-on-year, an increase of 1.04 percentage points from the same period last year; total profit increased by 3.16% year-on-year, an increase of 2.20 percentage points from the same period last year . Since October 2020, the profits of textile enterprises have gradually increased.
Cluster: equipment utilization increased year-on-year
According to the follow-up investigation of the cluster situation, in January 2021, cluster production generally slowed down, and the utilization rate of enterprise equipment decreased month-on-month and increased year-on-year.
It is understood that, consistent with the overall situation of the industry, in late January, the orders of cluster enterprises decreased, and most enterprises began to prepare for production cuts and holidays. Clusters and companies with a large number of migrant workers actively responded to the country’s call for on-site Chinese New Year, and introduced a series of measures to attract workers to celebrate the Chinese New Year on-site, such as giving red envelopes to employees who stayed in the local Chinese New Year, and increasing relevant benefits. Enterprises shortened the Spring Festival holiday, tracking the average operating rate of cluster enterprises at about 60%, and the operating rate of the regulated enterprises was about 83%.
For the later market, companies said that the current global new crown epidemic situation is showing signs of slowing down, and countries have begun vaccination, especially the Chinese market has shown strong resilience and vitality. It is expected that the market will gradually pick up.