China Wool Textile Industry Association: Wool Spinning Operation Tends To Be Stable In The First Quarter

In the first quarter, facing the severe and complex international situation and the arduous task of restoring market demand, the industry actively sought development and stability, production demand stabilized and recovered, market expectations improved significantly, export situation recovered steadily, and the overall starting situation of wool textile stabilized.

　　 1、 In 2023, the production of wool textile industry will recover

Since 2023, the overall capacity utilization level of the wool textile industry has been in the recovery range. From January to February, the output of wool yarn increased by 21.3% year on year, continuing the good start of the past three years.

Growth of wool yarn output of enterprises above designated size from January to February 2018 to 2023

The output of wool fabrics still continues the level of last year. The output of wool fabrics from January to February 2023 is the highest level in the first two months since 2019, which is 17% higher than that of the same period last year.

Changes in wool fabric output of enterprises above designated size from January to February 2018 to 2023

　　 2、 The consumer market has recovered steadily, and downstream production has driven industrial demand

　　 Domestic social retail consumption recovered rapidly

China's domestic market sales recovered quickly. From January to March this year, the total retail sales of consumer goods reached 11492.2 billion yuan, an increase of 5.8% year on year. The total retail sales in the United States fell 0.8% month on month in March. Since 2023, the consumption scale in the European Union has shown a slight decline. In February, the total retail sales fell 0.9% month on month.

Change of total retail sales of consumer goods in EU, China and the United States from September 2022 to January 2023

Source: National statistical offices

　　 Textile and wool textile consumption trend recovered steadily

Consumption of textiles in domestic and foreign markets recovered steadily. From January to March, the retail sales of clothing, shoes and hats of domestic units above the designated size increased by 9% year on year, and the online retail sales of clothing products increased by 8.6%. In the international market, from January to February, the total imports of wool and textile products from the EU, the United States and Japan were 540 million, 530 million and 150 million dollars respectively, up 16.5%, 12.6% and 50.2% year on year.

Wool textile imports from the EU, the United States and Japan from January to February 2023

Source: Eurostat, OEXTA, Ministry of Finance of Japan

　　 The downstream production trend is good

On the downstream industrial chain of wool textile products, the domestic suit market continues to have a good production trend. From January to February, the production of suits increased by 8% year on year, indicating a good demand market for woven fabrics.

Change of suit production trend from 2018 to 2023

(Note: Data from January to February in 2023)

　　 3、 Export keeps growing and the structure of main export markets changes

　　 Woolen textile exports continued to grow in the first quarter

According to the statistics of China Customs, from January to March 2023, the total export of wool textile raw materials and products will be 2.35 billion yuan, up 7% year on year. Among them, the export volume of wool products with a high proportion of wool components (more than 50%) was $760 million, up 11.9% year on year, while the export volume of wool products with a high proportion of cashmere components was about $300 million, down 13.9% year on year.

Export volume and year-on-year change of wool textile products made of main raw materials from January to March 2023

　　 ASEAN becomes the main export destination

Affected by multiple factors, in the first quarter, the proportion of export value of wool textile products to the United States declined. From January to March, wool textile raw materials and products exported to the United States totaled 410 million dollars, down 0.8% year on year, accounting for 17.3% of the total export, down 1.4 percentage points year on year.

Woolen textile raw materials and products exported to the EU in the first quarter totaled 390 million US dollars, up 10.9% year on year, accounting for 16.7% of the total export volume, up 0.6 percentage points year on year. Among them, the export of wool yarn and wool sliver to the EU grew rapidly, with the export volume increasing by 62.5% and 49.2% respectively.

The importance of ASEAN as the export destination market of wool textile products has been further enhanced. From January to March, the total amount of wool textile raw materials and products exported to ASEAN was 410 million dollars, up 17.4% year on year, accounting for 17.6% of the total export volume, becoming the largest export destination of wool textile products. Among them, the export of wool fabrics to the EU grew rapidly, with the export volume increasing by 26.4%.

Proportion of main export destinations of wool textile raw materials and products from January to February 2022 and 2023

Source: China Customs

　　 4、 The polarization of wool textile enterprises is still obvious

From January to February, the operating income of wool textile and dyeing and finishing enterprises above designated size dropped 7.9% year on year, of which the revenue of wool top and wool yarn and wool weaving both declined, but since last year, the situation of wool weaving is better than that of wool top and wool yarn.

Growth rate of operating income of wool textile and dyeing and finishing enterprises above designated size and sub sectors from 2018 to 2023

(Note: Data from January to February in 2023)

The cost control of the wool textile industry is reasonable, and the enterprise's product innovation and industrial upgrading have improved the added value of business. In the first two months, the average profit margin of wool textile, dyeing and finishing enterprises above designated size was 3.22%, up 0.9 percentage points year on year.

Changes in average profit margin of wool textile and dyeing and finishing enterprises above designated size from 2018 to 2023

(Note: Data from January to February in 2023)

On the other hand, the loss of wool textile enterprises above designated size increased by 24.2% year on year, with a loss of 42.3%. The differentiation between loss making enterprises and well managed enterprises has intensified, and some small and medium-sized enterprises are facing the difficult situation of weak orders and declining benefits.