Analysis of the production and operation of the cotton textile industry in 2020

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  Looking back at the production and operation of China’s cotton textile industry in 2020, in the period of antipandemic and the resumption of production, the domestic consumer market demand is gradually recovering, and the negative impact of the pandemic on the production and operation of textile enterprises is gradually lessening. Starting from the second quarter of 2020, the capacity utilization of cotton textile enterprises has gradually increased, the quality and efficiency of operation have gradually improved, and enterprises have gradually increased their confidence in the future development of the industry.
  The decline in yarn and cloth output has narrowed, and equipment utilization has gradually increased
  Data from key enterprises tracked by the China Cotton Textile Association show that the yarn output in 2020 dropped by 6.76 percent year-on-year, of which the output of pure cotton yarn, cotton blended yarn and chemical fiber yarn dropped by 5.15-8.12 percent year-on-year; the cloth output decreased by 11.38 percent year-on-year, of which the output of pure cotton cloth, cotton blended fabric and chemical fiber cloth decreased by 7.01-23.70 percent year-on-year. Since February, the year-on-year decline in yarn and cloth production has continued to narrow. Compared with February, the year-on-year decline in production in December narrowed by 25.62 and 15.99 percentage points, respectively.
  The data on raw material consumption shows that in 2020, the consumption of raw materials dropped by 6.51 percent year-on-year, of which the consumption of raw cotton dropped by 5.09 percent, the consumption of imported cotton in raw cotton dropped by 15.17 percent, and the consumption of non-cotton fiber dropped by 8.87 percent. The year-on-year change trend of the raw material consumption of cotton textile enterprises is basically the same as that of the yarn output. Since February, the raw material consumption has gradually increased. In August, China’s apparel exports showed positive growth for the first time in the year. The consumption of imported cotton increased sharply year-on-year, and the decline narrowed 10.59 percentage points compared with July.
  In terms of equipment utilization, since companies tracked are mainly large and medium-sized enterprises, production and operation are relatively stable, and the overall utilization of equipment is better than the average level of the national cotton textile industry. Data shows that the spinning equipment utilization in 2020 has decreased by 0.29 percent year-on-year. Weaving equipment utilization increased by 1.30 percent yearon-year. On a monthly basis, the equipment utilization of cotton textile enterprises has gradually increased since February, and the overall utilization of spinning equipment is better than that of weaving equipment, which is consistent with the purchase and sale of yarn and cloth markets. With the continuous improvement of the domestic economy, the purchase and sales of yarn and cloth markets have gradually recovered, but the market transmission is not smooth, and the purchase and sales of the downstream grey cloth market are not as good as the yarn market.   Sales continued to improve and product inventory declined
  Sales data show that the yarn sales volume in 2020 decreased by 4.31 percent year-on-year, of which the sales volume of pure cotton yarn, cotton blended yarn and chemical fiber yarn decreased by 3.76-5.49 percent year-on-year; the cloth sales volume decreased yearon-year 13.51 percent, of which the sales volume of pure cotton fabrics, cotton blended fabrics and chemical fiber cloth fell by 9.17-25.43 percent year-on-year.
  The data shows that there are two characteristics: one is that the sales volume of grey cloth has fallen significantly higher than that of yarns; the second is that the year-on-year change trend of yarn and cloth sales is basically the same as the output, and the decline is gradually narrowing. Since August, the year-on-year decline in sales volume was smaller than the decline in its output, and the yarn inventory decreased significantly; the year- on-year decline in cloth sales has been higher than its output decline since the beginning of the year, and the cloth inventory has continued to increase. This shows that the current domestic economic and social development is improving, production and supply continue to recover, and the demand in the downstream market is gradually picking up, but the overall demand is still weak.
  Product inventory data show that in 2020, the yarn inventory of cotton textile enterprises dropped by 19.38 percent year-on-year, of which the inventory of pure cotton yarn, cotton blended yarn and chemical fiber yarn dropped by 8.90-27.89 percent year-on-year; cloth inventory volume increased by 16.02 percent year-onyear, of which the inventory of pure cotton cloth, cotton blended fabric and chemical fiber cloth increased by 13.09-44.84 percent year-on-year, with the largest increase in chemical fiber cloth.
  On a monthly basis, since April, yarn inventory has gradually decreased year-on-year, while cloth inventory has continued to fluctuate. Compared with April, the year-on-year decrease of yarn inventory in December has narrowed by 41.60 percentage points, and the yearon-year increase of cloth inventory has increased by 5.65 percentage point. It can be seen that by the end of December, the yarn inventory was at a historically low level. Spinning companies strictly controlled production and sales, produced on-to-order, fast production and quick sales, and avoided production risks by reducing inventory.
  Data on raw material inventory shows that in 2020, the total raw material inventory of cotton textile enterprises increased by 0.37 percent year-on-year, of which raw cotton inventory decreased by 3.69 percent year-onyear, imported cotton inventory in raw cotton decreased by 8.71 percent year-on-year, and non-cotton fiber inventory increased by 11.92 percent year-on-year. This shows that textile companies have begun to adjust their product structure to cope with the impact of various fac-tors, and the use of non-cotton fibers has increased rapidly. On a monthly basis, since February, the year-on-year decline in raw material inventory has continued to narrow, and since July, it has turned from negative to positive year-on-year. As cotton textile enterprises gradually increase their confidence in the later market, their willingness to purchase raw materials has increased and inventory has increased.   The domestic market demand is released and the economy is recovering
  The data shows that in 2020, the main business income of cotton textile enterprises dropped by 8.62 percent year-on-year, the main business cost dropped by 8.43 percent year-on-year, the total profit dropped by 13.83 percent year-on-year, the export delivery value dropped by 19.59 percent year-on-year, and the industrial added value dropped by 9.03 percent year-on-year, and the percentage of loss-making enterprises increased by 0.83 percentage points.
  On a monthly basis, since February, with the exception of the export delivery value of major economic indicators, the year-on-year decline in other indicators has continued to narrow, showing the strong resilience and vitality of China’s domestic demand market. Among them, compared with February, the decline in main business revenue in December narrowed by 21.87 percentage points, total profits narrowed by 57.91 percentage points, industrial added value narrowed by 19.06 percentage points, and the number of loss-making enterprises decreased by 59.63 percentage points, and the percentage of loss-making enterprises decreased by 18.60 percentage points. The government has introduced tax and fee reduction measures to continue to reduce the burden on enterprises. The cost of main business has dropped significantly year-on-year, but the total profit of the company has dropped more than the cost of main business year-on-year the profitability of companies tracked in 2020 has dropped by 0.27 percentage points year-onyear.
  There is still much uncertainty about the current global pandemic, and the economic downturn is difficult to reverse. The global supply chain is facing huge adjustments, which are both challenges and opportunities. At the same time, the domestic economy is expected to improve and the domestic market will continue to recover. During the “14th Five-Year Plan” period, under the new development pattern of “dual circulation”, China will build a more solid economic foundation, more perfect infrastructure conditions, and a more superior innovation environment. The cotton textile industry is thinking and seeking new directions in the new development pattern.
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