The textile industry can be divided into 3 categories of industrial textiles, apparel textiles, and home textiles according to their uses. Among them, apparel textiles include various textile fabrics that are produced by a regular process on different textiles makeup machines such as automatic drawing-in machine, and accessories materials that affect the color, shape, and performance of clothes so that is used in the production of clothes, gloves, socks and other products.
Analysis of the Upstream Market
The upstream market of the textile industry refers to the market that is at the beginning of the entire industrial chain and provides raw materials and parts manufacturing and production. In the textile industry, cotton, chemical fiber, and the leather are 3 main raw materials that are made of finished textile products, which matters a lot in the development of the whole upstream market.
1. Cotton
Cotton is one of the most essential raw materials for the textile and apparel industry. At the current stage, both China and international cotton supply pressure is reached a high level, with the market price of cotton continues rising for a period of time. According to the China National Bureau of Statistics, China's national cotton production reached 5.73 million tons in 2021, even it is a decrease of 180,000 tons compared with the previous year.
2. Chemical Fiber
Chemical fibers account for more than 84% of China's total textile fiber processing and are the most important fiber raw materials for the textile and apparel industry. With the effective control of the domestic epidemic and the gradual recovery of textile terminal demand, the production growth rate of China’s chemical fiber industry has steadily picked up. The data calculated in 2021 indicate that the total output of China’s chemical fiber industry will reach 67.085 million tons, a year-on-year increase of 9.10%.
3. Leather
Leather is a kind of denatured non-perishable animal skin that is obtained by dehairing and other physical and chemical processing, and has wide applications in the textile and apparel industry. According to the data, China's leather production is 597 million square meters in 2021, which is an increase of 4% from the previous year.
Analysis of the Midstream Market
From 2017 to 2021, China's textile and apparel industry had a continuous expansion of its import scale and an increase in its export market share. According to China Customs data, China exported US$315.5 billion in textiles and garments in 2021, which is an increase of 8.4%(an increase of 0.9% in RMB), compared with the previous year. And China imported US$27.73 billion in textiles and garments in 2021, an increased of 20.4% in 2020.
However, Due to the significant slowdown of overseas demand since 2022, caused by the factors such as the situation in Russia and Ukraine, inflation in Europe and the US, and downstream inventory pressure, the recent devaluation of the RMB has favored export competitiveness and is expected to make bigger profits of textile and apparel industry.
Analysis of the Downstream Market
The downstream market of the textile and apparel industry refers to brand apparel merchants, supermarkets, and foreign traders. We can indicate from the data in 2021 that there will be 914 professional textile and garment markets with a scale of more than 10,000 square meters in China, which decreased by 1.19% compared with 2020; the number of shops in the market in 2021 is 1.405 million, has also decreased of 1.19% than before. While the turnover reached 2.33 trillion RMB, which has increased by 1.98% to 2020.
Conclusion
Market participants generally believe that the depreciation of the RMB is conducive to the recovery of the profitability of export companies, especially the enterprises in the textile and garment industry that will be benefited the most.
In recent years, China's total textile and clothing exports accounted for more than 10% of China's total exports, and textile and clothing companies with a large proportion of overseas business will benefit to a greater extent, and the data of the semi-annual report in the previous year is also expected to be developed to the high-quality targets in the future.
