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The news that the United States will impose sanctions on Xinjiang cotton products spread like wildfire, and the spot price of cotton futures has plunged accordingly, making cotton spinning companies that hold cotton in hand and plan to purchase cotton unprepared.
The reason why small and medium-sized textile enterprises are not aware of what to do with such a market is that most small and medium-sized textile enterprises have relatively single operating varieties, average technology and strength, and poor ability to resist risks. In recent years, small and medium-sized textile enterprises concentrated in the coastal areas along the Yangtze River have suffered multiple beatings from the market. They are currently in a state of "closing a batch, dying of a batch, and barely supporting a batch". The overall operating situation is due to the epidemic and foreign trade. Under the double suppression, it has been difficult to revitalize this year.
In response to the US sanctions on cotton products in Xinjiang, some small and medium-sized textile enterprises that directly provide yarn raw materials for foreign trade clothing and home textile products have expressed their pressure to double. According to the person in charge of Jiangsu Dafeng Textile Enterprise, although they have not received a notice from downstream suppliers to restrict the supply of less raw material yarns, they are already psychologically prepared. First, lower the position of raw cotton to the factory price, and first reduce it by 100 -200 yuan/ton purchase and strict accounting with the spinning products, spinning as fast as possible to reduce the price difference and raw material and product backlog; second, actively follow the market trend, maintain close communication with upstream and downstream, and adjust production and sales in time; third Intensify the implementation of the management strategy of "small at both ends and fast in the middle", resolutely implement the retention of small inventories (raw cotton and yarn), speed up the order production schedule, and strive to deliver in advance. For order purchases under the turbulent situation, the bottom line is to "maintain capital, support the enterprise, and retain people", instead of trading at a loss.
Relevant people in the industry expect that if the United States initiates sanctions on Xinjiang cotton products, the textile business using Xinjiang cotton as raw materials will suffer heavy losses, and textile companies will inevitably make helpless choices when using cotton in the future. Faced with daily operations, small and medium textile enterprises have already formed a lot of experience in dealing with market turbulence and their own operations. Small and medium textile enterprises that have come from fighting the epidemic and fighting foreign trade risks will hold on to the winners, with worrying pressure. Walking on a road full of ups and downs and thorns, Chinese textile enterprises are growing and becoming more mature in the process of tempering.