How Should Cotton Spinning Enterprises React To The Cotton Market Shock Caused By Sino US Trade War?

The war between China and the United States was triggered by the war of tariffs.

Influenced by the Sino US trade war plus tariffs, since the middle of May, the two or three grade lint quotations have decreased by more than 500 yuan / ton. In addition to the direct impact of futures declines, the market shock caused by the Sino US trade war is also one of the incentives.

Due to the short term downward impact of the market, some textile enterprises have slowed down the process of product sales and bulk purchase of raw materials. Therefore, yarn inventory of some enterprises has increased significantly. The yarn stock of some 20 thousand ingot spinning enterprises in Yancheng, Jiangsu has reached more than 100 tons, which is almost a month's output. In the survey at the end of this month, the yarn of enterprises is usually 10-15 days of production stock, and the current stock rise is obviously affected by the decline of yarn quotations.

A company official said that the shock of cotton trade in the Sino US trade war was first the futures market, and then the first line spinning enterprises. The concrete performance was that the quotations of cotton and cotton yarn fell sharply, and the volume decreased conservatively, and the stock of finished products of textile enterprises increased, and the textile market was complicated and confusing.

The head of a textile enterprise in Jiangsu believes that the United States is a major exporter of Chinese textiles. The Levy of tariffs is a new cost burden for textile export enterprises. The market and enterprises can only cut down the prices of raw materials and products by reducing the burden and reduce costs.

Then, how will the enterprises respond to the downward trend of cotton prices?

In the low efficiency of textile industry today, small and medium-sized textile enterprises absorb heavy burden.

In terms of finished goods inventory, most enterprises draw lessons from the storm of cotton market, and have gone through the low and low inventory route for many years, but there are still a large number of small enterprises, because of the recent market impact, the sales are not smooth, and the stock has increased greatly. Some 20 thousand spindles of small spinning enterprises have nearly 2 million tons of yarn stock, reaching the production volume in February, and the pressure of funds can be imagined.

A 60 thousand spinning enterprise in Dafeng, Yancheng, said that the stock of cotton that was not included in the road up to May 15th was more than 600 tons, equivalent to the amount of cotton used by the company for two months, and its average price was about 15500 yuan / ton.

According to the recent trend of cotton and yarn market, enterprises will face new pressure of cost increase.

Another part of the 200 tons of blended yarn stock enterprises, textile enterprises boss is worried.

Through a visit to some enterprises in Jiangsu, it is understood that small and medium-sized cotton textile owners in Northern Jiangsu are mostly sold in the past few years. Most of the textile enterprises retained in the city are 2-8 spindles, with 100-800 employees, mostly cotton less than 90s cotton, and annual sales of 45 million yuan -1.8 billion yuan.

In the middle of May, when the turbulence in the cotton market began to appear, these enterprises were not aware of the fact that they were more worried about supernormal stock, because the change of cotton market was mainly reflected in the price of cotton yarn, and the different sales price would inevitably form a loss of operation, and the enterprises would inevitably be entangled in inventory and price.

In the face of difficulties, most enterprises are deliberate their respective countermeasures.

First of all, we should pay attention to the market situation and judge the future trend of the market.

Enterprises believe that a high degree of concern about policies and market conditions is the premise to ensure that they do not lose the general direction.

Secondly, we must have a precise grasp of the trend of the upper and lower lines.

Keeping a close eye on the market dynamics of reserve cotton, the current reserve cotton is the guarantee for the important production materials of textile enterprises, and is also the "vane" of domestic and international cotton prices. Therefore, the analysis and evaluation of daily competition and its market are important strategic resources for enterprises to face the market.

We should also have a comprehensive understanding of the trend of the downstream market.

Recently, several business owners of textile enterprises in Yancheng, Jiangsu, have planned to form an alliance to engage in a "weaving enterprise" line, focusing on the personalized demand of raw materials for the enterprises, focusing on the face-to-face exchanges and discussions with the requirements of technology, fancy and matching ratio, with a view to adjusting production and product lines in time to meet the overall needs of the downstream market, and to take the right track of listing as early as possible.

This is also an important way for enterprises to actively respond to inventory rise.

Generally speaking, although this year's off-season is a bit early, the textile enterprises that can still stay in the market have gone through the ups and downs of large and small markets, and have been fighting for many years, and have relatively strong ability to resist risks. I believe that before long, we can find a way of development for their own enterprises, and the market will not remain depressed. What do you think?