In the first quarter of 2020, due to the combined impact of multiple factors such as the sudden outbreak of the novel coronavirus pneumonia epidemic in China, the extension of the Spring Festival holiday, and the spread of the epidemic overseas, the main economic indicators of the dyeing industry have all shown a significant decline, and the industry's operation is facing considerable pressure.
01 Dyed Fabric Production
In the first quarter, the output of dyed fabrics from above-scale dyeing enterprises was 9.401 billion meters, a year-on-year decrease of 15.15%. In February, the domestic epidemic prevention and control situation was severe, and traffic and logistics were obstructed, making it extremely difficult for the industry to resume work and production. Since March, with the improvement of the domestic epidemic prevention and control situation and the continuous progress of the resumption of work and production, the rate of decline in output narrowed by 7.27 percentage points compared with January-February. By the end of the first quarter, although the resumption rate of the dyeing industry had reached a high level, the overall capacity utilization rate remained low.
02 Main Quality and Efficiency Indicators
In the first quarter, the overall operation of the industry was difficult, and the main quality and efficiency indicators showed a year-on-year downward trend. The three-expense ratio of above-scale dyeing enterprises was 7.95%, an increase of 0.65 percentage points compared with the same period in 2019, of which cotton dyeing enterprises were 7.56% and chemical fiber dyeing enterprises were 11.41%. The cost-to-profit ratio was 2.60%, a decrease of 0.92 percentage points compared with the same period in 2019; the sales profit margin was 2.50%, a decrease of 0.85 percentage points compared with the same period in 2019; the finished product turnover rate was 3.58 times/year, a year-on-year decrease of 38.13%; the accounts receivable turnover rate was 1.81 times/year, a year-on-year decrease of 25.25%; and the total asset turnover rate was 0.19 times/year, a year-on-year decrease of 25.25%.
In the first quarter, affected by the epidemic, domestic and foreign demand weakened, most enterprises had insufficient production, some enterprises saw a decline in product prices or processing fees, coupled with the inelasticity of expenses such as wages and rent, as well as the increase in epidemic prevention and control and logistics and transportation costs, the profitability of enterprises declined significantly. Above-scale dyeing enterprises achieved 48.535 billion yuan in main business income, a year-on-year decrease of 23.64%; the main business cost was 42.888 billion yuan, a year-on-year decrease of 23.35%, accounting for 88.37% of the main business income; the total profit was 1.213 billion yuan, a significant year-on-year decrease of 43.08%; and the export value was 7.999 billion yuan, a year-on-year decrease of 18.80%. At the same time, the proportion of losses and the total amount of losses in the industry increased significantly. Among the 1561 above-scale dyeing enterprises, 745 enterprises suffered losses, with a loss ratio of 47.73%, an increase of 19.38 percentage points compared with the same period in 2019; the total losses of loss-making enterprises amounted to 1.149 billion yuan, an increase of 72.56% compared with the same period in 2019.
However, compared with the data from January to February, since March, with the continuous improvement of the domestic epidemic prevention and control situation and the continuous increase in the resumption rate of work and production by enterprises, especially as government support policies for the industry have continuously yielded results, the prosperity of the dyeing industry has seen some recovery, and the decline in main business income and total profit of enterprises above designated size has narrowed by 6.24 and 58.72 percentage points respectively compared with January and February.
03 Import and Export of Eight Major Categories of Dyeing
After the Spring Festival, affected by the domestic epidemic, it was difficult for enterprises to resume work and reach full production capacity, which had a certain impact on foreign trade orders. In mid-to-late March, the global epidemic spread rapidly, and the epidemic in the United States and Europe continued to escalate, making the overseas prevention and control situation increasingly severe, which caused a huge impact on China's foreign trade demand for textile and clothing. Dyeing foreign trade enterprises face a new round of difficulties and problems such as difficulties in fulfilling contracts, poor international logistics, and lack of new orders, and the foreign trade situation is becoming more severe.
According to customs statistics, in the first quarter of 2020, the total import and export volume of eight major categories of dyeing was US$5.392 billion, a year-on-year decrease of 17.79%; the trade surplus was US$4.811 billion, a year-on-year decrease of 17.08%. The import volume of eight major categories of dyeing products was 138 million meters, a year-on-year decrease of 33.97%; the import value was US$290 million, a year-on-year decrease of 23.24%; and the import unit price was US$2.11/meter, a year-on-year increase of 16.25%. The export volume of eight major categories of dyeing products was 5.083 billion meters, a year-on-year decrease of 14.76%; the export value was US$5.102 billion, a year-on-year decrease of 17.46%; and the average export unit price was US$1.00/meter, a year-on-year decrease of 3.17%.
From the perspective of markets, in the first quarter, the export value of eight major categories of dyeing products to ASEAN decreased by 13.19%, and the export value to countries along the Belt and Road decreased by 12.88%, which were 4.27 and 4.58 percentage points better than the overall export growth rate respectively. The export value to traditional markets such as the United States, the European Union, and Japan decreased by 29.72%, 25.39%, and 20.28% respectively.
In terms of month-on-month comparison, with the gradual progress of the resumption of work and production in China, foreign trade enterprises accelerated the production of pre-holiday orders and seized time to fulfill contracts. At the same time, the lagged effect of the impact of the overseas epidemic existed, and the decline in export value in March narrowed slightly by 0.62 percentage points compared with February.
In the next two months, with the global epidemic spreading and escalating continuously, large-scale cancellations or delays in international orders, and a significant increase in international logistics costs, the upward trend in the industry's operation at the end of the first quarter is difficult to maintain. In April and May, the industry's operation will be impacted by insufficient global demand and sluggish economic circulation, and the operating situation is not optimistic.
