Dongguan Shengyuanxin Industrial Co., Ltd.

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Raw materials skyrocket! Downstream factories desperately to keep profits
Release time: 2021-02-28 17:12:12  Hits: 51

"Copper rose by 38%, plastics by 35%, aluminum by 37%, iron by 30%, glass by 30%, zinc alloy by 48%, and stainless steel by 45%!"A factory owner said in a post.


Right now, the biggest problem for factory owners is: Are the prices of products rising along with raw materials? Or would you rather lose money than raise prices?


Some people think that if the price of raw materials rises, the products will naturally rise.

Some people also believe that raw materials are located in the upstream of the industrial chain, which is monopolistic competition and can increase prices; the downstream of the industrial chain is full competition and excessive competition. Whoever increases the price first will die, and the increase is to send customers to others.


"The price of plastics has risen since the beginning of the year, and it may have risen by about 30% compared to the end of last year. There are many types of plastics, and each material has risen to varying degrees." Mr. Zhou of a plastic products company wrote Weigh


Taking PC plastic materials as an example, Mr. Zhou issued a document saying that when he inquired the price a year ago, the price was 21,000/ton, and the price had risen to 24,000/ton after the next year. On February 26, its quotation has risen to 26,000/ton.

In other words, the current increase in this type of raw materials has reached about 23.8%, which is similar to the increase in NYMEX crude oil in the past two months.


Mr. Zhou’s upstream supplier is a polymer material company, and its person in charge, Ms. Li, said, “When I came back to start construction after the year, I found that it has risen. The rise is quite strong. Different plastic materials have risen by about 3,000-6,000 yuan/ton. Some have risen by more than 30%."

The factory faces multiple-choice questions: Is the product price increase? Maintaining old customers at a loss?

After the price of raw materials has risen, the biggest problem faced by factory owners is: Does the product price increase with the price of raw materials? Still not increasing the price?

Some people believe that as the price of raw materials rises, products will naturally rise, so it is reasonable to re-determine product pricing based on the increase in raw materials.

Some people also believe that raw materials are located in the upstream of the industrial chain, which is monopolistic competition and can increase prices; the downstream of the industrial chain is full competition and excessive competition. Whoever increases the price first will die, and the increase is to send customers to others.

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