Market Difficulties and Countermeasures of Refined Cotton Enterprises in the Epidemic of COVID-19

The sudden and unexpected COVID-19 has exerted a great influence on our national economy. With the epidemic breaking out all over the world, all countries have made epidemic prevention and control the top priority. Although China has been the first country to successfully combat the epidemic, epidemic prevention and control has become a routine work for all organizations. The epidemic has disrupted the economic expectation at the start of 2020 and cast a heavy shadow over the country, the industries and the economic development. In particular, it has had a huge and long-period impact on our refined cotton enterprises, as the main raw material of Sodium Carboxymethyl Cellulose (CMC) is refined cotton, which influences the CMC price greatly. So how do we deal with this situation?

Market difficulties under the epidemic of COVID-19

The impact of the epidemic on the market has become apparent: it is inevitable that the global market will shrink. Production and operation all over the country have been suspended for two months. Until now, it has been difficult for production and operation to fully recover in all regions. From the perspective of industry chain, there is a risk of market volume decline in the domestic market no matter for refined cotton industry or other industries. Many industries and enterprises are affected by the reduced end-user consumption, which will also affect our industry and related upstream and downstream industries. As for the refined cotton, the upstream supply chain will be affected at least until new cotton to be on the market, and the downstream industries will be affected at least until the first half of next year. The epidemic is spreading in the international market, causing the decline of exportation. International conflicts have intensified, resulting in the change of market pattern. The shortage of end-user consumption will inevitably increase the circulation of domestic market, leading to price competition. The epidemic has disrupted the market order, and the competition among enterprises has become more brutal and fierce.

Countermeasures to current market difficulties

Firstly, following the beneficial national policies, we should be confident of our industry prospects, as refined cotton is the basic material of cotton cellulose. It is an indispensable new material to national economy and the basis and foundation for the high-quality development of national industries. Refined cotton and its derivative products are the basis of many industries, such as food, medicine, petroleum, paper-making, as well as military industry. Secondly, we need to continue to upgrade technology to improve the quality, increase the added value of products, ensure environmental protection and safety, and minimize the incidence of accidents. Thirdly, we also need to keep self-disciplined, because market economy is self-disciplined economy to a certain extent. Without self-discipline, the market will be a chaotic one; Without self-discipline, enterprises will lose their integrity. Finally, we should maintain stable prices with reasonable profits and make steady progress in line with market changes. At present, profit margins of refined cotton are getting smaller and smaller with the rising tendency in raw material price and the already increasing transportation price. At this time, we must stand on the same side and be honest about the price.

Refined cotton is a promising product in the market. With the support of the party and government, with the support of the association, and also with our common effort, as long as we have self-discipline, integrity and firm faith, we can definitely overcome the market segmentation after the epidemic and become the winner of market competition.

August 7, 2020
Source: China Cellulose Industry Association


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