3Since March, under the unified arrangement of the China Textile Industry Association (referred to as "China Textile Federation"), the China Cotton Textile Industry Association (referred to as "China Cotton Association") continues to track the production and operation of enterprises through questionnaire The above is the analysis of the survey in the fourth week of March (23-29) for reference.
1. Overall Overview
In the fourth week of March, the production recovery of large cotton textile companies continued to improve, but affected by the global epidemic, the business confidence of the company was once again frustrated, and the capacity utilization rate changed from a gradual increase to a decline. The outstanding performance is that for the first time in the first half of 2020, the company's revenue forecast is lower than that for the first quarter.
Since March 24, foreign orders have been cancelled and slowed down one after another. It is expected that the export value and export volume will drop sharply, and enterprises are facing the situation of reducing the opening rate. Cotton textile enterprises have sufficient supply of raw materials, prices continue to fall, and the pessimism of the industrial chain is gradually transmitted from downstream to upward.
2. Production recovery
In the fourth week of the month, large cotton textile companies insisted on their social responsibilities. Among the large cotton textile companies participating in the survey, 98.4% of the companies had started construction, and the number of resumed workers accounted for 94.0% of the number of workers under normal production conditions. The recovery situation is shown in Figure 1. The company's start of work and staff's arrival continue to improve.
Figure 1 Start-up of cotton textile enterprises and staff arrival
Note: The data reported are mainly for large companies, and the operating rate of the companies obtained from statistics is expected to be higher than the actual situation. Since the companies surveyed each week will be different, the relevant results are for reference only.
From the perspective of capacity utilization, the capacity utilization rate of 59.52% of the enterprises has reached more than 80%, a decrease of 5.98 percentage points year-on-year, and it is immediately affected by the export orders. Some enterprises that originally had a higher capacity utilization rate chose to reduce the opening rate appropriately .
Table 1 Capacity utilization rate of cotton textile enterprises in March
3. Production recovery of industrial clusters
According to the China Cotton Association's follow-up survey of the start-up of nearly 20 cotton textile industry clusters, as of March 30, according to the information provided by the surveyed cluster office and other departments, affected by the foreign trade situation, the cluster enterprises produced When there is a slowdown, the average operating rate and capacity utilization rate of the company have declined, and the employee arrival rate continues to increase, as shown in Table 2.
Table 2 Production of cotton textile industry cluster resumed
Source: Various Cotton Textile Cluster Offices China Cotton Textile Industry Association
The start of cotton textile cluster enterprises in the fourth week of March mainly showed the following characteristics:
(1) From the perspective of construction, the average operating rate of cluster enterprises is 69%, which is a decrease of 3 percentage points from the previous week. The 90% cluster indicates that the cancellation of export orders is the main factor affecting the business operating rate. In the case of large-scale reductions in orders from large enterprises, some small enterprises, which mainly rely on entrusted processing, have limited ability to take orders independently, taking the lead in reducing or stopping production.
(2) Judging from the order situation, due to the global epidemic situation, the capacity utilization rate has declined. Some clusters said that orders for direct export of cloth products fell by 50% to 70%, and orders for indirect export yarn decreased by about 30% to 50%.
(3) From the perspective of staff arrival, the average arrival rate of staff in cluster enterprises is about 70%, an increase of 5 percentage points from the previous week. With the weakening of market demand, the personnel produced by some enterprises took turns taking positions, changing from three shifts to two shifts or one shift.
4. Revenue and investment
The questionnaire also surveyed the impact of the company's revenue and the pace of investment planning.
Since late February, insufficient orders have been one of the problems reported by cotton textile companies. From the latest survey results, there has been a decline in corporate orders. Obviously, 78.4% of the export orders of enterprises are less than half of the normal level, a decrease of 30.6 percentage points from the previous week.
Figure 2 Order recovery of cotton textile enterprises
In March, the downturn in corporate investment confidence has improved compared with February. At this stage, some enterprises with fixed asset investment projects are willing to restart the project. At present, the enterprises that choose to continue construction are 1.5 times the enterprises that have been suspended.
The survey shows that in the prediction of sales revenue and exports in the first quarter of 2020, in terms of sales revenue, companies that believe that the first quarter will be less than 20% lower than the same period last year account for the highest proportion; in the case of exports, they believe that the first quarter The proportion of enterprises that will decrease by 20% -50% compared with the same period last year is the highest. It is believed that the proportion of enterprises that reduce by more than 50% has the largest increase, as shown in Figure 3. With the end of the first quarter, the decline in export volume has become a fact, and the export market is under greater pressure.
Figure 3 Pre-judgment of sales revenue and export volume in the first quarter compared with the same period last year
Cotton textile companies also predicted the sales revenue and export situation in the first half of 2020. With the spread of the epidemic around the world, many countries have adopted "closing country" measures, resulting in the cancellation of a large number of export orders, and the number of new orders has been significantly reduced. In addition, there have been cases where the goods have been stranded or rejected in overseas ports, and the cost burden has increased. . China's cotton textile industry went down again after a slight improvement. The survey results in the fourth week of March were significantly different from the previous weeks. As can be seen from Figure 4, companies believe that the negative impact of the epidemic on the sales revenue and export situation of the cotton textile industry in the first half of the year will be more serious than in the first quarter, and market confidence has declined significantly. 52% of companies believe that sales revenue in the first half of the year will be higher than the same period last year If it is reduced by more than 20%, the export situation will be even less optimistic. The proportion of enterprises that believe that the export value will be reduced by more than 20% over the same period last year is as high as 72.5%. It is estimated that the global epidemic tension will continue for 3-4 months, and foreign trade enterprises affected by this may face a difficult period of at least 4-6 months.
Figure 4 Pre-judgment of sales revenue and export value compared with the same period last year
5. Industry chain
In the fourth week of March, 98.6% of all enterprises participating in the textile and apparel industry have started construction, and the number of resumed workers accounted for 94.5% of the number of workers under normal production conditions, an increase of 1.6 and 3.5 percentage points from last week The progress of industrial chain resumption has basically been synchronized.
1. Supply of upstream raw materials for cotton textile
As for the upstream raw materials of cotton textiles, there is sufficient supply of cotton, the price of petroleum has dropped sharply, and the prices of chemical fiber staple fibers have continued to fall. Under the weight of the downstream market, cotton textile raw materials are currently in oversupply.
2. Downstream operation of cotton textile
The cooperation in the cotton textile industry chain started to continue to improve, and the situation of resumption of work increased synchronously, but the pressure on orders increased. According to the survey by the China Household Textile Industry Association, starting from March 18, many export companies received notices of delayed shipments from European and American customers, and some overseas customers canceled orders for nearly two months.
Six, online information feedback
Since February 14, the China Cotton Association launched an online service platform for prevention and control of epidemic situation and resumed production (referred to as "online information"). As of March 29, it has received more than 170 messages from more than 130 companies. At the same time, the China Cotton Association has learned about the current market concerns through various channels.
Affected by the outbreak of the global epidemic, the market situation is not optimistic, and the withdrawal of foreign trade orders is serious. At present, the upstream textile, printing and dyeing, fabric, and downstream apparel companies are very cautious. They do not plan to purchase raw materials on a large scale as usual. It is expected that the textile raw materials market will continue to weaken. It is understood that some companies are considering adjusting the market structure, focusing on the domestic market, and shifting cancelled orders from export to domestic sales; some companies may not be able to withstand a variety of cost consumption and business losses, or will open Taiwan and layoff plans.
The China Cotton Association will continue to pay attention to the epidemic prevention and control trends and the actual production and operation of the enterprise, summarize and feed back to the China Textile Federation and relevant departments in a timely manner, earnestly perform the duties of the China Cotton Association, and do a good job of industry information warning and analysis. During the period, strive to ensure the smooth operation of the industry.