Analysis of the economic operation of the filament weaving industry in the first three quarters
Since 2023, the downward pressure on the global economy has been highlighted, the negative impact of tightening monetary policy on the global economy has accelerated, and external demand has generally declined. The National Bureau of Statistics announced that GDP increased by 5.2% year-on-year in the first three quarters of this year, and the national economy continued to recover. In this context, the overall efficiency of China's filament weaving industry has improved slightly, the domestic market is under pressure and the export volume of foreign trade has increased year-on-year, but the profit pressure is more prominent, and the stable operation is still facing many tests such as insufficient demand, shrinking orders, and rising costs.
First, the economic operation of the industry is under great pressure
According to the statistics of the National Bureau of Statistics, from January to September 2023, the operating income of China's textile industry above designated size decreased by 3.3% year-on-year, the operating cost decreased by 3.5% year-on-year, and the total profit decreased by 8.8% year-on-year. In terms of industries, the operating income of chemical fiber weaving and printing and dyeing finishing industry (above designated size) increased by 3% year-on-year, the operating cost increased by 3.4% year-on-year, and the total profit decreased by 13.8% year-on-year. Among them, the operating income of the chemical fiber weaving industry (above designated size) increased by 4.2% year-on-year, the operating cost increased by 4.6% year-on-year, and the total profit decreased by 12.2% year-on-year; The operating income of the chemical fiber fabric dyeing and finishing industry (above designated size) decreased by 1.6% year-on-year, the operating cost decreased by 1.5% year-on-year, and the total profit decreased by 21.4% year-on-year.
Under the situation of sluggish global market demand, the filament weaving industry as a whole is under pressure. In January ~ February 2023, the operating income and total profit of the filament weaving industry on the scale were negative, and the operating income achieved positive year-on-year growth after the first quarter, and the decline in total profit showed a narrowing trend, and the total profit decline in January ~ September was 32.3 percentage points narrower than that at the beginning of the year, and the quality and efficiency improved slightly.
Second, the production situation is under pressure
Affected by sluggish demand, filament weaving enterprises have difficulties such as insufficient orders and increased inventory, and the pressure of full-load production is greater. According to the statistics of the association, in the first half of 2023, the total output of chemical fiber filament fabrics in Shengze, Changxing, Xiuzhou, Longhu, Siyang, Pingwang, Qidu, Keqiao, and Xiaohai will be 14.7 billion meters, a year-on-year decrease of 1.1%. Since entering the third quarter, the company has reported that the production situation is more optimistic than the first half of the year, and since August, the weaving start-up rate and grey fabric inventory value have developed well. Overall, the production situation has yet to fully recover.
Third, the price of raw materials has risen
Figure 1 shows the changes in the price trend of China's chemical fiber filament, cotton, PTA futures and Brent crude oil. In January ~ May 2023, the price of Brent crude oil fell back to $72.1 / barrel, and after May, international oil prices rose sharply under the situation of increasing global demand and tight supply, and exceeded $92 / barrel in September. On the whole, the price of nylon FDY fluctuated greatly in 1~9 months. Polyester DTY/FDY prices were raised in the first quarter, and rose again after a brief retreat in the second quarter. For weaving enterprises, it is necessary to be wary of the risks brought by price fluctuations at the cost end, which may have a certain degree of impact on production.
Fourth, the pressure on export prices is obvious
The lack of momentum for the recovery of the world economy, the frequent occurrence of local conflicts and turbulence, and the increase in unstable, uncertain and unpredictable factors in the external environment have brought huge challenges to the development of the textile industry. According to China Customs statistics, from January to September 2023, China's textile and apparel exports were US$223.15 billion, a year-on-year decrease of 9.5%. Among them, clothing exports were 121.23 billion US dollars, a year-on-year decrease of 8.8%; Textile exports were 101.92 billion US dollars, a year-on-year decrease of 10.3%.
From January to September 2023, the cumulative export value of China's chemical fiber filament fabrics was 15.08 billion US dollars, a year-on-year decrease of 3.5%; the cumulative export volume was 17.11 billion meters, a year-on-year increase of 4.3%; The export unit price was 0.88 US dollars / meter, a year-on-year decrease of 7.5%, and the export price pressure was greater. Excluding the impact of the exchange rate, in RMB terms, the cumulative export value of China's filament fabrics in January ~ September 2023 will increase by 3.4% year-on-year.
Fifth, the domestic market is gradually picking up
Since the beginning of this year, the orderly recovery of China's production and life order, the expansion of consumption scenarios, and the implementation of policies to promote consumption have driven domestic demand for textiles and garments to achieve good growth. According to the data of the National Bureau of Statistics, from January to September 2023, the retail sales of clothing, shoes and hats, and knitted textiles above designated size in China increased by 10.6% year-on-year, an increase of 15 percentage points over the same period of the previous year; The retail sales of online clothing products increased by 9.6% year-on-year, an increase of 5 percentage points over the same period last year.
After the Spring Festival in 2023, China's market prosperity index will gradually recover, and then fluctuate slightly, with obvious seasonality, indicating that the market activity is not high, but the overall situation is slowly improving. According to the association's research, industry enterprises reported a slight year-on-year increase in domestic orders. On the whole, the performance of the domestic market is relatively stable. From January to September 2023, the price index of chemical fiber fabrics in China rose slightly, reflecting to a certain extent that the market demand for chemical fiber fabrics has picked up, but the main reason is driven by the rise in cost.
Judging from the trading volume of China Textile City, due to the rebound of domestic demand orders, the textile market rose to a certain extent in the first quarter, and the transaction volume of interwoven products increased. In the second quarter, the transaction price of chemical fiber grey fabrics, polyester fabrics, and polyester ammonia fabrics rose slightly, and the market for daily home textiles and window screen fabrics was better, and the sales of jacquard curtains, polyester ammonia four-sided elastics, and polyester taffeta were considerable. In September, popular textile fabrics such as cotton, polyester viscose, tencel, human silk, and functional sports fabrics sold well. In general, the competitive pressure of China's main filament fabric mass products and conventional products is greater, and the demand for special products is stronger. According to the association's research and enterprises, mid-to-high-end fabrics are more likely to be favored by buyers, and the audience of fabrics with their own texture is also very wide, and the profits of fabrics with functionality, sportiness and comfort are relatively considerable.
6. Future prospects
At present, the international situation is not yet completely clear, and the world economy is still facing many uncertainties, but the fundamentals of China's overall economic recovery have not changed, and the central government has unswervingly increased its support for the private economy and boosted the confidence and vitality of private enterprises. Next, the textile market will also usher in new opportunities for demand growth such as the Double 11 carnival season and the Christmas Black Friday stocking season. In the case of favorable policies, China's filament weaving enterprises need to continue to pay attention to domestic and foreign market trends, trade environment changes, raw material price trends and RMB exchange rates, seize the opportunity, to innovation to power, to management to efficiency, to talent vitality, fully tap the potential of domestic demand market, and strive to expand the international market space, to achieve the industry's economic operation to take the lead in the overall improvement.
Source: China Textile Economic Information Network
