As the new year approaches, textile companies have successively introduced holiday plans and issued holiday notices. It is understood that the holidays for yarn companies are basically between January 5th and 16th, and most of the start-up times are after the tenth day of the lunar month. In addition, about 20% of small factories have extended the holiday to start work around March 1st. At present, the number of active days in the cotton spinning market is relatively limited, with less than a month left. How is the operating situation of spinning companies? How to arrange a smooth transition after stocking is completed before and after the new year?
Liquidate product inventory for New Year orders
Looking back at the market situation in 2019, most spinning mill owners talk about the term “market winter”. More and more textile people complain that business is getting harder and harder to do. Operating expenses continue to rise, sales volume increases become increasingly difficult, and competition content continues to be refined…
For small and medium-sized spinning companies, reduced orders are a common problem. “In the past year, our yarn mill has received orders for production, and we have taken orders as soon as they come in. But near the end of the year, a lot of inventory has still accumulated.” The person in charge of a spinning mill in Hebei said with emotion that many manufacturers are currently in the stage of clearing inventory, and even It means that selling cotton yarn for money is also a helpless move.
It is understood that in 2019, some small factories with smaller sizes and weak ability to compete with the rapidly changing market stopped working. As the cotton spinning market improved, some small factories resumed production. Process some small and micro order products. For enterprises that are in normal production and sales, there is no plan to increase production as the new year is approaching. First, they are worried about the market changing again. Second, orders are not abundant. Third, the peak season of production and sales in the yarn clothing market at the end of the year has passed, and the demand for raw materials has increased. Balanced or slightly reduced.
Specifically, the production and operation status and plans of textile enterprises across the country are also different. The start-up rate of enterprises depends on the current production situation. For example, the start-up rate of private textile enterprises in Nantong, Jiangsu is about 5% to 10% higher than that in Yancheng. %. The reason is that the textile industry in Shanghai and Hangzhou, which are adjacent to Nantong, is relatively developed. Nantong has always been the main supplier of raw materials such as cotton spinning, clothing, and bedding in these areas, so the market conditions are more favorable than those in northern Jiangsu.
In addition, many companies in the market focus on order organization in order to achieve a smooth transition before and after the holidays. Many textile companies in Dafeng, Yancheng, are in the process of visiting users, negotiating business, and signing orders. It is understood that the order production of local textile enterprises has been arranged until before the Spring Festival, and the current focus is on the production orders in the first quarter of 2020 after the Spring Festival. Textile companies with a good local production and sales situation have orders on hand until April 2020, but the orders are small and scattered.
In terms of raw material procurement, textile companies still have limited inventory reservations. It is the end of the year, and textile companies have their own plans for how much raw materials to prepare, but not many companies intend to increase inventory. At present, the majority of companies choose Qinjin and Fast Sales. The survey shows that it is common to keep raw materials in stock for 30 to 45 days. Due to the production transfer after the Spring Festival, not many companies specially arrange to increase inventory. As long as there are orders and funds in hand, it is not a problem to organize the raw materials on the truck in time. .
Reduce procurement risks and maximize benefits
With the further enhancement of the transparency of cotton market operations, the benefits of each link are close to Go public. As a textile enterprise, cost control is the focus of operating profits. Raw material costs, processing costs, and management costs all have room for improvement and are in a state of clarity. Textile companies organize raw materials through different channels and methods, and the resulting cost advantages and disadvantages are also different.
At present, after experiencing the ups and downs of the cotton market in the second half of the year, many spinning companies are in the process of recovery as cotton prices heat up. Before and after the Spring Festival, how should spinning companies purchase raw materials to prepare for normal production after the new year?
In this regard, experts believe that in order to achieve stable production after the new year, it is necessary to plan in advance and make early preparations for stocking up. For some enterprises that have to consider both funds and purchasing cost-effective resources, they must consider the following aspects to avoid wasting manpower and material resources.
First of all, enterprises should consider whether their existing raw material inventory can meet normal production needs. From inventory needs to meet one week to one quarter, enterprises of different sizes have different requirements for their inventory production. According to research, due to poor performance this year, individual companies have only used raw materials for 3 to 5 days to save capital costs, or even shorter production reserves. In the future, if there are special circumstances such as rain, snow or logistics and transportation, they must It will have an adverse impact on normal startup and may cause certain losses. Therefore, enterprises must proceed from the actual situation and avoid losing big because of small things.
Secondly, because many companies adopt a purchase-as-you-go model, they are more concerned about the status of product orders. Especially after the recent easing of Sino-US trade relations, some orders have begun to flow back. Should we increase inventory plans? Experts suggest that if China and the United States formally sign the first phase agreement in January, the probability of increased orders after the Spring Festival will increase. Enterprises with sufficient funds may appropriately expand the purchase quantity of raw cotton.
In addition, experts said that based on the current market conditions, purchasing cost-effective cotton resources is generally of concern to textile companies. For companies with high demand for cotton quality, they can consider purchasing high-quality imported cotton such as Brazilian cotton or high-quality Xinjiang Corps cotton in the new year. They can also choose Xinjiang warehouse receipt cotton. Especially when the Zheng cotton CF2001 contract is approaching delivery, the Xinjiang cotton in the previous year is relatively cost-effective. high. RightFor orders with special needs, such as long-staple cotton and Australian cotton, the company can purchase some Pima cotton and Australian cotton if conditions permit. For the demand for mid-end cotton, you can choose to lock in cost-effective Xinjiang cotton through point pricing. Whether it is point-priced old cotton or new cotton, the price difference is large due to differences in strength, impurities, horse value supply and other indicators, so focus on comparison. Select the desired metric. For the choice of low-quality supply, you can choose low-priced Xinjiang cotton, imported cotton, or match Xinjiang cotton with local cotton.
In short, enterprises must not only consider the macro cotton market situation, but also make in-depth comparisons from detailed demand indicators, and start from their own operating conditions in order to minimize procurement risks and achieve maximum benefits. change. </p
