China’s cotton textile prosperity index in March 2020 was 46.36, an increase of 3.97 compared with February. This month, my country’s cotton textile companies have basically resumed work, and the production and sales rhythm has recovered at the beginning of the month. However, due to the continued impact of the global epidemic, the foreign trade situation is not optimistic, and domestic consumption has not seen a significant improvement, and textile companies have gradually slowed down their production pace.
In order to study and deploy further coordinating the promotion of epidemic prevention and control and economic and social development, the Political Bureau of the Central Committee held a meeting on March 27. The meeting clearly stated that “we must promptly study and propose a package of macro policy measures to actively respond”, including Expand investment, expand consumption, stabilize exports, etc., and strive to complete the annual economic and social development goals and tasks.
With the implementation of various support policies issued by the state, enterprises have received strong support in terms of finance, taxation, finance, and employment stabilization, and have achieved an orderly resumption of work and production. Internationally, the continued deterioration of the global epidemic has had a significant impact on the economic growth of various countries. The global financial market has entered a plummeting mode, and stock indexes in many countries have triggered circuit breakers. Faced with this situation, governments and central banks of various countries have successively stepped in to rescue the market and implemented various easing measures to curb the impact of the epidemic on the economy. impact.
The China Cotton Textile Industry Association (hereinafter referred to as the China Cotton Textile Industry Association) suggests that for my country’s cotton textile enterprises, developing markets, reducing expenditures, and withdrawing funds have become the top priorities at this time. In addition, they can take advantage of this opportunity to ” “Cultivate internal strength”, check and fill in the gaps in the company’s internal system construction, personnel management, equipment safety management, etc., to enhance the company’s strength.
Raw material purchase price index
The raw material purchase price index in March was 45.60, a decrease of 2.92 compared with February. In March, domestic and foreign cotton prices fluctuated and fell. That month, domestic and foreign consumer demand did not improve, especially as the epidemic abroad intensified and orders from foreign trade companies dropped sharply. Affected by this, the production pace of cotton spinning enterprises has slowed down, and raw material prices have plummeted. Enterprises’ replenishment is mainly based on rigid needs to avoid excessive occupation of funds.
In early March, the Federal Reserve announced an emergency interest rate cut of 50 basis points. This information intensified the market’s concerns about the U.S. economic downturn. The U.S. stock market plummeted, and domestic and foreign cotton prices fell in tandem, with futures falling more than spot prices. Subsequently, due to the breakdown of OPEC+ alliance negotiations, Saudi Arabia is expected to significantly increase production in April, starting a price war, and crude oil prices have plummeted.
On March 9, the U.S. stock market suffered its largest decline since the financial crisis. The Dow Jones index fell into a bear market, ending the longest bull market in the history of the U.S. stock market. Affected by this, Zheng Mian’s price fell sharply that day. Limit down.
On March 26, the National Development and Reform Commission announced a policy to improve the cotton target price in Xinjiang. The cotton target price of 18,600 yuan per ton will once again remain unchanged for three years. This news is conducive to stabilizing my country’s cotton planting area in the new year and providing certain support for cotton prices. However, overall, the global COVID-19 epidemic is still very severe and has a significant impact on the global economy and consumption. The overall environment has not changed, and demand is expected to be short-term. It is difficult to see an improvement in the domestic market, and market confidence has returned to calm after a brief recovery.
Specific data, the average price of domestic 3128 grade cotton that month was 11,955 yuan/ton, down 1,260 yuan/ton from the previous month; the average CotlookA index was 67.69 cents/pound, down 8.89 cents/pound from the previous month; mainstream viscose The average fiber price was 9,480 yuan/ton, a month-on-month decrease of 64 yuan/ton; the average price of 1.4D direct-spun polyester staple was 5,972 yuan/ton, a month-on-month decrease of 1,069 yuan/ton.
Raw material inventory index
The raw material inventory index in March was 46.74, a decrease of 2.79 compared with February In March, my country’s cotton textile companies started operations one after another, and raw material inventories were somewhat digested. However, affected by the epidemic, the production pace slowed down. Some foreign downstream companies have frequently withdrawn and suspended orders due to factors such as local import controls and expected market downturns, and export-oriented companies have been hit hard. Affected by factors such as sluggish demand in the downstream of the industrial chain and falling raw material prices, raw material procurement has become more cautious, and textile companies’ raw material inventories remain at about two to three weeks.
In addition, the operating pressure caused by the epidemic continues to be transmitted from downstream, reducing capital chain risks and ensuring cash flow are also one of the main considerations for most companies to buy and use. Tracking data from the China Cotton Industry Association shows that raw material inventories fell by 3.09% month-on-month in March. Although raw material prices rebounded slightly in April, the impact of the epidemic is still ongoing, and raw material procurement is expected to remain cautious.
Production Index
The production index in March was 45.14, an increase of 7.57 compared with February. That month, the epidemic in my country was effectively controlled, and cotton spinning companies in various places began to resume operations. According to a survey by the China Cotton Industry Association, more than 90% of the companies participating in the survey have started operations normally in March, but the opening rate is low. There are three main reasons:
1 This is because domestic consumer demand is still waiting to recover, and the phenomenon of “running out of orders” in foreign orders is serious, and sales have not improved, forcing production to slow down;
Secondly, due to the continuous decline in raw material prices, yarn The prices of threads and gray fabrics lack support from price increases, but the raw material costs of already produced products are high and the prices are not attractive;
Thirdly, enterprises are under great financial pressure. In order to ensure capital turnover, in �When the market environment does not improve significantly, we should try our best to slow down production and reduce the growth rate of product inventory.
In April, because sales did not improve, some small businesses were already considering downsizing.
Product Sales Index
The product sales index in March was 45.04, with An increase of 10.82 compared with February. That month, textile companies started operations one after another, and sales work ended its suspension and got back on track. At present, downstream demand is relatively light, and textile companies are mostly digging into the market based on market demand and striving to stabilize market share. Tracking data from the China Cotton Industry Association shows that yarn and cloth sales increased by 143.56% and 108.55% month-on-month in March.
At present, the domestic market is in a slow recovery stage, and it will still take some time for demand to surge; the epidemic situation abroad has intensified, and many countries in Europe, North America, Southeast Asia and other regions have adopted measures such as country closures, city closures, grounding of flights, and suspension of operations. According to reports from enterprises, since mid-March, orders from the United States and Europe have been temporarily suspended and temporarily withdrawn. According to the China Cotton Industry Association, as the market is still in a sluggish wait-and-see mood and the downstream purchasing atmosphere is light, some textile companies have cut prices in order to withdraw funds as soon as possible and reduce inventory pressure. The “price war” has begun.
Product inventory index
The product inventory index in March was 49.46, with It increased by 1.11 compared to February. This month, as the consumer side continues to be sluggish and downstream purchases are light, textile companies have difficulties in shipping. Even if gauze production remains low, a large amount of product inventory will be generated; some export-oriented companies have been affected by the temporary withdrawal of orders from foreign customers, and the products they have produced have It can only be stored temporarily, which also increases the inventory pressure. Tracking data from the China Cotton Industry Association shows that as of the end of March, yarn inventory increased by 1.74% month-on-month, and cloth inventory increased by 2.96% month-on-month. Although the production speed of enterprises has been slowed down as much as possible, due to the market downturn and great sales resistance, product inventories are still rising. In March, most enterprise product inventories were more than one month old, and this trend is expected to continue in April.
Business operating index
The business operating index in March was 46.33, an increase of 8.91 compared with February . That month, the domestic epidemic was effectively controlled, the resumption of work and production was accelerated, the economic and social order was being restored in an orderly manner, and the short-term impact caused by the epidemic was gradually alleviated. According to data from the National Bureau of Statistics, in March, China’s manufacturing purchasing managers’ index (PMI) was 52.0%. Except for the price index, all sub-indexes of the manufacturing purchasing managers’ index have rebounded. They mainly show the following characteristics: 1. The effect of the policy is gradually emerging, and business expectations have rebounded. Second, enterprises of different sizes have rebounded, with large enterprises recovering relatively quickly. Third, market supply and demand have improved, and purchasing behavior has been more active than last month. However, due to the rapid spread of the epidemic around the world, world economic and trade growth has been severely impacted, and enterprises are still under great pressure in production and operation.
Explanation: China’s cotton textile industry prosperity index is collected from more than 200 cotton textile enterprises across the country. It is calculated by weighting multiple major indicators. When the index is higher than 50, it means that the prosperity of the cotton textile industry is improving. Below 50 indicates poor economic conditions. </p
