1. Do it immediately (for short-term survival, 0-3 months)
1. Quick conduction cost: Immediate price adjustment, binding raw material prices in new contracts, and reducing the validity period of quotations to 3-7 days; giving priority to short-lead-time, cash-on-delivery, and high-margin orders, and resolutely refusing long-lead-time, price-locked orders that result in losses.
2. Avoid pitfalls in procurement: Only maintain a safety stock of 2-4 weeks for production, and never panic and hoard goods at high prices; propose collective procurement with peers to gain pricing power, and seek more domestic, coal-based/gas-based materials to replace high-priced oil-based materials.
3. Hedging price risk: Lock in the purchase price of raw materials with futures/options, only hedging actual production needs, and strictly prohibiting speculation and market gambling.
4. Reducing losses at the production end: Centralized production scheduling to minimize mold changes, compliant recycling of scrap materials, and minimizing raw material waste.
II. 3-12 months (stabilize the market in the medium term and build strong anti-risk capabilities)
1. Diversify the supply chain, sign long-term price-fixing agreements with upstream suppliers, arrange for sources of recycled plastics, and reduce dependence on oil-derived raw materials.
2. Compliant and optimized formula, utilizing filler modification and cost-effective alternative raw materials to reduce the usage of high-priced new materials, thereby reducing costs without compromising product performance.
3. Reduce low-margin general-purpose products and shift to high-value-added functional plastic parts, thereby enhancing premium pricing capabilities and reducing customers' sensitivity to price increases.
III. Long-term fundamental solution (completely breaking free from the binding of crude oil cycles)
1. Develop bio-based and recycled plastics to decouple from crude oil prices at the material source.
2. For vertical integration of the industry chain, one must either secure raw material production capacity upstream or connect with end-users downstream to provide comprehensive solutions, thereby gaining pricing initiative.
3. Establish a normalized price early warning and hedging mechanism to anticipate fluctuations and no longer be passively pressured.
IV. Red lines that must not be crossed
Don't hoard goods at high prices to speculate on market trends, don't turn hedging into futures speculation, don't accept long-term orders at a loss just to win orders, don't compromise quality by changing formulas illegally to reduce costs, and don't strain the capital chain too tight by strictly controlling accounts receivable.
