The prosperity index of China’s cotton textile industry steadily rebounded, reaching 50.5% in July, surpassing the critical point, with an increase of 0.2 percentage points from June. In July, the supply side experienced tighter cotton supplies, leading to a sharp rise in domestic cotton prices. Gauze prices followed the increase, and there was a slight improvement in the downstream market, boosting textile mills’ operations and market confidence.

Regarding the sub-index, in July, the raw material purchasing index was 49.9%, 1.9 percentage points lower than in June; the raw material inventory index was 48.9%, down 3.0 percentage points month-on-month; the production index was 50.0%, down 0.1 percentage points from June; the product sales index was 51.5%, increasing 1.8 percentage points month-on-month; the product inventory index was 50.4%, up 2.0 percentage points from the previous month; and the business index was 51.0%, up 0.6 percentage points from June.

The prosperity index of China’s cotton textile industry is based on a weighted calculation of numerous key indicators from about 500 core cotton textile companies. A reading above 50% indicates expansion, while below 50% reflects contraction.

Figure: Prosperity Index of China Cotton Textile Industry

Source: CHINA TEXTILE LEADER Express