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Brief Analysis of Business Risks and Barriers in Polyester Staple Fiber Industry
Operation risk refers to the delay of capital movement and the change of enterprise value caused by uncertain factors in the supply, production and sales of enterprises in the production and operation process. Another way of saying is that the uncertainty of future earnings caused by business decisions such as strategic choice, product price and sales means, especially the risk of changes in pre interest and pre tax profits caused by the use of operating leverage, is called operating risk.
As far as polyester staple fiber production enterprises are concerned, the most important business risks lie in investment, cost and cash flow. The biggest operational risk is the control of cash flow. Since the listing of futures, polyester staple fiber factories are not familiar with the use of futures instruments, and a large number of goods have flowed into the hands of current traders. When futures prices fall, staple fiber factories, although the price is firm, have no choice but to sell at a reduced price due to a large number of low price goods, making cash flow pressure greater; However, with the production control of staple fiber factories and the limited sales of futures traders, the cash flow has been improved. From the perspective of investment, whether the supply and demand of polyester staple fiber and downstream fields are balanced determines the investment direction of enterprises. From the perspective of cost control, the supply of PET staple fiber raw materials PTA and ethylene glycol is sufficient, and the cost can be locked through PTA and ethylene glycol futures, so the risk of cost control is relatively reduced.
As far as the polyester staple fiber traders are concerned, the most important business risks lie in the purchase sales rhythm and the high frequency fluctuation of the polyester staple fiber price. The biggest operational risk lies in the control of the spot basis: first, the impact of the liquidity of polyester staple fiber spot on the spot market and the control of the reasonable operation range of the basis; However, under the influence of capital and plate fluctuations, the basis will fluctuate abnormally. At the same time, the stability of production, the uncertainty of downstream consumption, and the application for delivery capacity are all risks faced by traders during the year.
For downstream yarn mills and other downstream factories, the operating risk lies in the price change of raw materials, that is, the cost change caused by the price change of polyester staple fiber. On the one hand, the cost can be locked through futures instruments. However, the downstream yarn mills are close to the terminal, and the consumption of terminal orders will also affect the downstream commencement of polyester staple fiber, thus affecting the downstream business.
Business barriers mainly include those caused by local protection, technical standards, business practices and regional culture. As for a certain market in a country, there are also various explicit and implicit market barriers. The initial research on market barriers mainly focused on the field of market entry. In fact, because manufacturers always operate in a specific time and space and under the corresponding market environment and institutional environment, they will encounter market barriers in the whole process of entering the market, developing or withdrawing from the market, with the perfect competitive market structure as the reference frame.
