Since April, the overall operation of China's cotton textile industry has continued the momentum of recovery since March. Cotton prices have rebounded, the textile production end has turned positive, the decline in domestic consumption has continued to narrow, and the external demand market has shown some repairing changes.

1. Repair price rebound of raw material prices

Since April, the negative effects of the epidemic have gradually weakened, driving global stock markets and crude oil prices to rebound, and cotton prices have shown signs of rising. The average price of the national cotton price B index, which represents the spot price of domestic standard-grade lint cotton, was 11,393 yuan / ton, down about 6% month-on-month. Since May, cotton prices have rebounded slightly to around 11,500 yuan / ton.

2. The price of cotton yarn gradually stabilized

Since April, the textile industry's resumption of production and production has further improved, and the rebound in raw material prices has driven cotton yarn prices back to stability. The average price of 32 count cotton carded yarns reflecting the price level of domestic mainstream yarn varieties was 19212 yuan / ton, a decrease of about 5.5% from the previous month and a cumulative decrease of 6.7% from the pre-Chinese New Year holiday. Since late May, the price of 32 cotton carded yarns has stabilized at around 18,700 yuan / ton, showing signs of stopping and stabilizing, and has not followed the rise in cotton prices.

3. The productivity of the textile industry first turned positive

With the accelerated pace of resumption of production and domestic production, the production of the textile industry has further resumed in April, and the growth rate of the main indicators has greatly changed from negative to positive. According to data from the National Bureau of Statistics, the industrial added value of the textile industry above designated size in April changed from a decline of 5.5% in March to an increase of 2.2%. The production of the textile industry has turned positive and is close to the normal level in the past two years.

4. The shrinkage of investment scale narrowed

In April, with the continuous improvement of the epidemic prevention, control, and resistance, a series of stable investment policies were implemented, and the degree of shrinking investment in the textile industry has improved. According to the National Bureau of Statistics, from January to April 2020, the fixed asset investment in the textile industry decreased by 32.5% year-on-year, a decrease of 4.6 percentage points from the previous month. Among them, the reduction in the textile, apparel and apparel industries narrowed by 4.1 percentage points. Under the epidemic situation, investment in anti-epidemic materials and export-to-domestic sales has become an important direction for industry investment.

5. The decline in domestic demand retail continued to narrow

Since April, domestic consumption has further improved, and the year-on-year decline in retail sales has continued to narrow. Statistics from the National Bureau of Statistics show that in April, the total retail sales of consumer goods fell by 7.5% year-on-year, a decrease of 8.3 percentage points from March. After May, holiday consumption accelerated the recovery of the market. From May 1st to May 5th, the Ministry of Commerce focused on monitoring retail companies ’average daily sales growth by 32.1% over the Qingming holiday, of which the average daily sales of clothing increased by 31.2% over the Qingming holiday With the continuous release of domestic demand potential, consumption is expected to make up.

Sixth, textile exports have improved, and the apparel export market has diverged

In April, the demand for overseas masks and epidemic prevention fabrics surged, driving China's textile exports in April to increase by 49.36% year-on-year. The decline in overseas consumption led to a 30.31% year-on-year decline in China's clothing exports. The main export market of China's textiles and apparel is in Europe and the United States. Since May, European epidemic control measures have been gradually relaxed, and clothing stores in many cities have resumed business. The high risk of the US epidemic remains high, and apparel retail sales plummet. According to statistics from the US Department of Commerce, sales of US apparel and apparel accessories stores fell by an unprecedented 78.8% in April, surpassing the largest monthly decline of 49.4% recorded in March. Judging from the current situation of China's foreign trade enterprises receiving orders, foreign demand orders are expected to improve, but it will not be obvious.

Based on the above analysis, the global epidemic prevention and control has become normal, and countries will restart their economies, and the consumer market will have a certain compensatory recovery. With the gradual recovery of the consumer market and the introduction of supporting policies, it is expected that the operating level of the cotton textile and apparel industry in the second half of 2020 will be significantly improved compared with the first half. In the long run, this epidemic has magnified a series of problems in the global cotton textile industry chain, and the situation facing China's textile companies is still grim. Policy support continuously optimizes the industrial ecological environment, and the domestic demand market potential has become a new advantage in industrial development. In order to solve the external demand environmental constraints, companies need to make efforts in strategic management, innovative breakthroughs, and value reconstruction to improve international competitiveness and anti-risk capabilities.

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