"Recently, due to the adverse situation of the iron ore negotiations, domestic steel prices have started to rise. At the same time, the prices of copper and zinc and other non-ferrous metals are also rising, coupled with the price of oil, coal and other fuels, the cost of hardware companies. The pressure is constantly increasing. If the price of related raw material fuel continues to rise, then it is not ruled out that hardware companies will start to increase the possibility of product ex-factory prices," said a spokesman for the International Hardware Exhibition Organizing Committee.
In fact, the purchase price of raw materials and fuel power for industrial products has continued to rise since the negative change in December last year, and rose by 5.9% and 11.5% respectively in March. The price of some raw materials rose even higher. In March, the price of non-ferrous metal materials and wires rose by 32.8% year-on-year, and the price of fuel-powered products rose by 25.6%.
The raw materials of hardware products are mainly steel, iron, copper, aluminum, zinc and other non-ferrous metals. Since the time of entry into 2010, almost all of these metal raw materials prices have risen. Coupled with the continuous increase in domestic refined oil prices, coal prices are also very unstable, causing hardware companies to face very large cost pressures.
China's hardware industry is a typical labor-intensive industry. The industry scale is large, but the technical level is not high. Most of them are engaged in export processing or OEM business. The added value of products is low and the profitability of enterprises is relatively poor. Therefore, hardware companies have poor ability to withstand cost pressure. .
Faced with the current large-scale price increase of raw material fuel costs, China's hardware companies are likely to be forced to take price increases. In the export market, China's hardware companies have always relied on the advantages of cheap labor to reduce costs, and participate in international competition at low prices to win the market. Therefore, for hardware companies, there is absolutely no way to do so, because this will greatly reduce their products internationally. Competitive in the market. "The National Hardware Exhibition Organizing Committee spokesperson said, "The price increase may be a double-edged sword for hardware companies. On the one hand, price hikes can help hardware companies resist rising raw material costs; on the other hand, price hikes may cause companies to lose market competitiveness, so that it is difficult to obtain international orders in the face of similar competitors. "
The spokesperson said that whether the price increase or not is a dilemma for hardware companies. In order to be able to raise prices to cope with rising raw materials, there must be a "two-step" plan. The first step is to expand and stabilize your sales channels, develop long-term cooperative customers, and ensure that the products will not be lost if the products are raised slightly. Secondly, in the long run, we must work hard to get rid of the current form of participation in international competition by low prices, and improve product quality and added value. When the product enters the high-end market, the price will naturally rise and it will not be so dependent on the cost of raw materials.
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