Status quo of China nonwovens and industrial textiles industry in the first half of 2018
Nov 20, 2018 ｜ by
In the first year of 2018, the global economy continues to recover, China actively boosts supply-side structural reform, and the economic development develops steadily. However, due to the emerging of protectionism in global trade and upturn in petroleum prices, China’s industrial textiles industry face a more favorable but more complex environment. In the first half year, the growth rate of industrial added value of reaches up to 7.8%, with a year-on-year acceleration of 3.8 percentage points compared with the last year, the main business revenue and profit of enterprises above designated increase by 7.75% and 1.39% year on year respectively. Besides, industry profitability is 5.1%, presenting stable development.
According to the research of association, the business index of textile industry in the first half of 2018 is 77.9, and the expectations index in the second half year is 71.5. The above data present slight decline compared with the whole year of 2017, which reflects that the complicated economic environment brings about certain impact on the enterprise performance and future expectations. However, these both indicators are still far above the line.
High growth of production
On the basis of the research of association, the demand index of domestic market in the first half year is 72.0, while that index of foreign market is 65.1. The changes in the global trade situation exert a negative impact on the demand for industrial textiles in overseas markets, the industry’s production index is 76.0, which is basically equal to that in 2017. From the perspective of main products, the output of nonwovens in China has reached to 1.8501 million tons, with a year-on-year growth of 8.24%; the output of curtain fabric has reached up to 35,200 tons, which declines 3.38% in the first half year of 2018 according to the national bureau of statistics. The output growth of nonwovens, as the main raw material of industrial textiles has already exceeded that of 2016 after adjustment in 2017, but there is still some distance from the high growth rate before 2015. The curtain fabric is a traditional product of the industry, its market is closely related to tire demand, while the output of China's tire increases by only 0.3% in the first half year, and the amount of polyester and polyamide cord fabric was basically equal.
Improved economic benefits but intensified differentiation
Based on the data of National Bureau of Statistics, the main business revenue and total profit of industrial textile industry above state designated scale is RMB 128.918 billion Yuan and 6.58 billion Yuan in the first half year, with a year-on-year growth of 7.75% and 1.39% respectively. The income growth rate is at a higher level in the textile industry, and the gross profit growth also reverses the decline since 2017. In addition, the average profit rate of the industry is 5.1%, with a year-on-year decline of 0.32 percentage points, the gross profit rate is 13.15, with a year-on-year decrease of 0.56 percentage points; the scale of losses of industry is 14.66%, the deficit of unprofitable firm RMB 439 million Yuan, with a year-on-year growth of 49.31%. The scale of losses and loss strength has been enlarged, of which the deficit of nonwovens increases 73.5%. However, according to the trace analysis of backbone enterprises of association on mainstay enterprises, the prime operating revenue and total profit of backbone enterprises of association on mainstay enterprises grow 14.11% and 2.65% respectively in the first half year of 2018, and the profit margin is 7.06%.
The industry profit returns to modest growth in the first half year mainly due to powerful development of filtration, soil engineering, security and protection, automobile textile and other industrial textiles. The prime operating revenue and total profit grows 9.02% and 30.34% respectively, and the profit margin reaches up to 7.11%, which owns the utmost profit margin in textile industry.
The price of major raw materials in industry remains high, which brings a high pressure to the profitability of the whole industry. In the first half year of 2018, the price of main raw materials of polyester staple fiber, nylon, polypropylene fiber and industrial textiles is high compared with 2017. The price of polyester staple fiber has been oscillating up since May 2017, which remains in a high price range at present, and the price fluctuation of polypropylene fiber in the first half year also reaches up to 10%.
In the first half year, the main business revenue and total profit of industrial textile industry above state designated scale is RMB 62.236 billion Yuan and 3.105 billion Yuan in the first half year, with a year-on-year growth of 7.42% and 0.37% respectively. The export delivery value grows 14.38%, the profit margin is 4.99%, with a year-on-year decline of 0.39 percentage points. From the perspective of production, sales and export delivery value, the market demand of nonwovens remains strong, and the income growth is slower than output growth, indicating that enterprises are difficult to pass the pressure of rising costs to downstream users although the price of raw materials has dramatic increase. The scale of losses of nonwovens enlarges to 14.18% in the first half year from 9.72% at the same period last year, and the unprofitable firm’s deficit increases over 70%. Besides, the rising price of raw materials and fierce industrial competition make it more difficult for some enterprises to operate.
The main business revenue of rope has been increased by 5.79% and profit has been decreased by 3.63%. However, the unprofitable firm’s deficit of industry declines 28.08%. The main business revenue of textile belts and curtain fabric grows 14.04%, which is the highest in the industry, and the profit decreases 1.96%. In addition, the main business revenue of sailcloth industry is basically the same as last year, while the rising raw-material prices and tightening environmental policies have led to rising costs for industrial firms. The industry profits have plunged by 24.87% and profit margins has decreased by 1.39%.
Steady export growth
According to the date of national bureau of statistics, the export delivery value of enterprises above state designated scale grows 5.57% in the first half year, of which the export delivery value of nonwovens increases 14.38%, the growth rate is 7.89 percentage points higher than a year earlier. From the data of enterprises above state designated scale, the export delivery value of industrial textile industry occupies a slightly higher proportion than clothing, and the overseas markets have a very important role on the steady development of the industry.
Full-year forecast
In the second half year, China will continue to develop steadily, adopt a proactive policy mix, to defuse risks and stabilize development expectations. However, the rising of raw material prices and Sino-US trade friction will bring in greater risk; the multiple risk factors will have great negative effects on the development of industry. It is predicted that the main factors of industry will maintain medium-to-low growth of single digit, the industry’s profitability will be reduced, and the enterprises will have more obvious differentiation.
(Source: China Nonwovens & Industrial Textiles Association)
