Hongjing

Since 2020, facing the "big test" of the epidemic, China's dyeing industry has steadily advanced the resumption of work and production. Currently, the production supply capacity and the coordination of the industrial chain have returned to normal. Although domestic economic activity has gradually recovered, the recovery of consumer willingness and demand for textiles and clothing still requires time. At the same time, since the epidemic has not shown significant signs of improvement abroad, the export situation of dyeing products remains severe, and the main operating indicators of the industry in the first five months are still in the negative growth range. As the domestic market gradually warms up, the operation of the dyeing industry is expected to recover under pressure.

1、The decline in dyed fabric production narrowed

From January to May 2020, the output of dyed fabrics by dyeing enterprises above designated size was 17.612 billion meters, a year-on-year decrease of 14.46%. Currently, China's epidemic prevention and control situation is generally good, and the order of production and life is steadily recovering. Although the export orders of enterprises have been greatly reduced due to the impact of the epidemic abroad, with the continuous release of domestic consumption potential, the recovery of the domestic market is obvious, and the year-on-year decrease in output in the first five months has narrowed by 1.40 percentage points.

2、Slight fluctuation in operating quality

From January to May 2020, the indicators of the operating quality of the dyeing industry showed slight fluctuations month-on-month, but there was still a large gap year-on-year. From January to May, the three-expense ratio of dyeing enterprises above designated size was 7.37%, an increase of 0.49 percentage points compared with the same period in 2019, of which cotton dyeing enterprises were 7.06% and chemical fiber dyeing enterprises were 9.82%. The finished product turnover rate was 6.31 times/year, a decrease of 31.11% compared with the same period in 2019; the accounts receivable turnover rate was 3.09 times/year, a decrease of 24.85% compared with the same period in 2019; the total asset turnover rate was 0.35 times/year, a decrease of 22.02% compared with the same period in 2019.

3Pressure of declining profits

Under the impact of the epidemic, from January to May 2020, the economic benefits of the dyeing industry deteriorated significantly, and dyeing enterprises faced greater operating pressure. From January to May, the main business income of dyeing enterprises above designated size was 86.988 billion yuan, a year-on-year decrease of 20.68%; the main business cost was 76.671 billion yuan, a year-on-year decrease of 20.42%, accounting for 88.14% of the main business income; the cost-profit margin was 3.28%, a year-on-year decrease of 1.00 percentage points; the sales profit margin was 3.14%, a year-on-year decrease of 0.92 percentage points; the total profit was 2.728 billion yuan, a significant year-on-year decrease of 38.73%; and the export delivery value was 12.416 billion yuan, a year-on-year decrease of 24.56%.

From January to May 2020, among the 1,563 dyeing enterprises above designated size, 652 enterprises suffered losses, accounting for 41.47%, an increase of 16.67 percentage points compared with the same period in 2019, and a decrease of 1.92 percentage points month-on-month; the total losses of loss-making enterprises were 1.552 billion yuan, a significant year-on-year increase of 86.08%, and the growth rate increased by 23.96 percentage points month-on-month. In previous years, May was the peak season for dyeing enterprises, and the profit level would increase significantly. However, due to the epidemic in 2020, the profit situation of enterprises in the first five months was more significantly different from the same period last year, and the total losses of enterprises increased significantly compared with the same period in 2019.

4、The severe export situation remains unresolved

According to the statistics of the General Administration of Customs of China, since May 2020, the severe situation faced by China's eight major categories of dyeing products exports has not been effectively alleviated. From January to May, the total import and export volume of the eight major categories of dyeing products was US$8.302 billion, a year-on-year decrease of 29.73%; the trade surplus was US$7.352 billion, a year-on-year decrease of 29.32%. The import volume of the eight major categories of dyeing products was 220 million meters, a year-on-year decrease of 41.58%; the import amount was US$475 million, a year-on-year decrease of 32.77%; and the average import unit price was US$2.14/meter, a year-on-year increase of 15.61%. The export volume of the eight major categories of dyeing products was 7.92 billion meters, a year-on-year decrease of 26.37%; the export amount was US$7.827 billion, a year-on-year decrease of 29.54%; and the average export unit price was US$0.99/meter, a year-on-year decrease of 4.30%.

From the perspective of market segmentation, the export of eight major categories of dyeing products to ASEAN, countries along the "Belt and Road", and Japan performed better than the overall export situation. From January to May, the export value of eight major categories of dyeing products to ASEAN and countries along the "Belt and Road" decreased by 22.06% and 26.01% year-on-year, respectively, which narrowed the gap compared to the overall export value by 7.48 and 3.53 percentage points, respectively. Exports to Japan decreased by 2.50% year-on-year and export value decreased by 13.05% year-on-year, narrowing the gap compared to the overall export value by 16.49 percentage points. Exports to countries and regions with severe epidemics such as the United States and the European Union continued to decrease, with export values decreasing by 33.70% and 37.34% year-on-year, respectively, and the decrease widening by 2.28 and 4.18 percentage points month-on-month, respectively.

Currently, the global COVID-19 epidemic is still worsening, and the task of epidemic prevention and control remains arduous. Overall, the downward pressure on the world economy continues to increase, and sluggish global demand will become a long-term existence. The situation of insufficient new orders will continue for some time among foreign trade enterprises, and enterprises' exports will continue to be under pressure. Although the external situation facing the dyeing industry remains severe, the gradually warming domestic market will provide strong support for the stable recovery of the industry's operation. At the same time, with the gradual implementation and efforts of China's "six stability" and "six guarantees" measures, the operating conditions of dyeing enterprises will improve in the second half of the year.

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