The reporter has recently visited many places and learned that the prices of industrial raw materials such as industrial metals, textiles and chemical fibers have risen sharply recently, and bulk commodities such as iron ore have hit new highs for many years. Many industries have been affected, especially some small, medium and micro enterprises in the upstream and difficult to raise prices downstream. The two sides of the price have already lost money, and the predicament may continue to intensify. The industry has judged that under the influence of multiple factors such as the international loose monetary policy, the prices of bulk raw materials may not be able to adjust quickly in a short period of time, and the upstream influence will gradually be passed on to downstream end products. To help companies build a long-term mechanism to resist the risk of raw material price fluctuations, hedging the impact of rising raw material prices requires joint efforts from multiple parties.

Companies caught off guard by price increases

The main force of Shanghai copper rose to 70,000 yuan per ton at the end of February, a nine-year high. The prices of downstream refrigerators and other home appliances have increased by more than 10%; the price of textile and chemical fiber has been adjusted across the board. Compared with the low price in 2020, the price of spandex has increased Nearly 80%; chemical giant WACKER announced a global price increase of 10% to 20%, and the price of organic silicon products such as 107 glue has increased by 13 rounds; the prices of industrial bone copper pipes and copper plates are approaching the record highs set in 2011. Nickel and tin The prices of other bulk commodities, such as aluminum, aluminum and iron ore, have soared to multi-year highs... The "general rise" and "surge" of industrial raw materials caught many companies by surprise.

In fact, the prices of industrial raw materials have already begun to rise. Liu Shikun, deputy general manager of an Anhui Electric Appliance Group Co., Ltd., said that in October last year, the company felt that the prices of raw materials were rising, and the prices of cold-rolled steel sheets and foam materials rose rapidly. The cost of the whole machine has risen by 20% this year, and the loss is serious. "The raw materials started to rise at the end of last year, and the increase was even greater after the Spring Festival. The price of aluminum rose by more than 2,000 yuan per ton, or more than 10%, and the cost of this item increased by nearly 3 million yuan." Liu Shikun said.

Shi Yuliang, a machinery procurement supervisor in Jilin Province, said that steel rose by three to four hundred yuan per ton, monthly procurement costs increased by 500,000 yuan, and copper and plastics also rose by about 20%.

"Affected by the sharp increase in raw material prices, upstream companies are better than downstream companies, and companies on regulations are better than companies under regulations." Niu Yutao, director of the Anhui Provincial Department of Economy and Information Technology, said that this year some companies will be less profitable than last year. If the brand is not strong enough, it may lose users or even face the risk of being eliminated. The market will gradually concentrate on leading companies.

In the textile, chemical, electrical and other fields, some small and medium-sized enterprises are in trouble due to the sharp rise in costs. In Jinjiang, Fujian, many companies reported that rising raw material prices combined with rising labor and transportation costs, production profits tended to be meager, and some companies were forced to choose to abandon orders. Liu Shikun said that now the company takes the initiative to control orders to stop losses, and about 20% of the small and medium-sized supply chain companies and supporting manufacturers outside the company have chosen to cease operations.

Many reasons lead to the "general rise" of industrial raw materials

Industry insiders pointed out that developed countries such as Europe and the United States have adopted more aggressive fiscal and monetary policies, coupled with multiple factors such as the slowing down of the epidemic prevention and control situation and the recovery of demand, which have jointly promoted the price increase of raw materials.

Zhu Jianbo, chairman of a chemical company in Jining, Shandong Province, said that the increase in raw material prices is related to the collective fiscal release by countries such as Europe and the United States to stimulate the economy. The increase in money supply has increased global inflation. Zhang Hongxin, deputy general manager of a Zhejiang Electric Drive Group Co., Ltd. analyzed that at the root, price increases are caused by inflation. For example, a series of rescue plans in the United States will be passed on to the futures market, slowly driving up the price of raw materials.

Li Xunjun, an analyst at a Shandong Information Co., Ltd., believes that after the Spring Festival, chemical products have seen a bull market, and the rise in crude oil has played a leading role. "Crude oil has a strong driving force for near-oil end products. Aromatics, olefins and other products are generally likely to rise." Li Xunjun said that the cold weather in the United States has caused local chemical companies to reduce and suspend production on a large scale. The market is expected to supply tightness and promote chemical products. The market skyrocketed.

With the epidemic under control, the global economy bottomed out, consumer demand recovered, orders surged, but stocks were insufficient. Niu Nutao believes that the global situation of prevention and control of the new crown pneumonia epidemic has improved, and the driving effect of the rebound in market demand is one of the reasons for the price increase of bulk commodities.

Zhong Sheming, deputy general manager of a Guangdong Furniture Co., Ltd., said that the company started to surge in orders since the second half of last year and deliberately increased its production lines. However, the raw materials are very tight. Taking imported pine wood as an example, the stock is only enough for half a month.

The heads of many companies said that the price of raw materials fell after the Spring Festival last year. This year, many companies were more cautious. Deng Zijin, deputy general manager of the General Manager's Office of an automobile company in Wuhu, said that state-owned enterprises have clear index requirements for debt ratio and inventory value, and generally do not allow too much reserve.

In addition, affected by the rebound of the domestic epidemic at the beginning of the year, many companies responded to the government's call to celebrate the New Year on the spot. According to Lin Yonghong, director of the Industry and Information Technology Bureau of Jinjiang City, Fujian Province, more than 53% of employees from outside the province stayed at the factory for the New Year. Therefore, after the holiday, enterprises started work early and started up enough, leading to a sharp increase in demand for industrial production in the short term.

The epidemic has caused difficulties in the turnover of containers, and the increase in logistics costs has boosted the price of raw materials. According to Zhang Hongxin, the sea freight has increased by a factor of 8 and 10 in different regions. "There are differences in the epidemic prevention situation at home and abroad. In the past, containers could be turned back and forth in international trade. Now China is the first to recover, and it has become one-way turnover. There is a shortage of containers." He believes that China International Marine Containers Co., Ltd. has a lot of orders and is expected to place this year. Only half a year will container turnover return to normal.

Small and medium-sized enterprises encounter difficulties, inflation risks may emerge

The reporter visited and found that the increase in the price of raw materials has brought a greater impact on the traditional manufacturing industries that are heavy assets and labor-intensive, such as home appliances, textiles, and machinery manufacturing. High-end manufacturing enterprises with high added value are not affected much. According to analysis, leading companies and large companies in the industry have ample capital flows and strong anti-risk capabilities. They can hedge against rising raw material prices by extending the industrial chain, buying futures, hoarding raw materials, and following price increases, which may even benefit raw material prices. The small and micro enterprises engaged in processing and finished products are directly affected by the increase in the price of raw materials, which is mainly reflected in the reduction of profits, and even "the more the door is opened, the more losses." If the rising trend of raw material prices continues, a group of companies may cease operations Or go bankrupt.

The tolerance of some companies to rising costs is approaching the "limit". Shi Yuliang, the purchasing supervisor of a machinery (group) limited liability company in Jilin Province, said that the company signs a long-term contract with the main engine factory and has to reduce prices to a certain extent every year. With the substantial increase in raw material costs, traditional manufacturing companies with a profit margin of less than 10% are struggling.

Ma Honglin, general manager of a Chongqing Precision Machinery Co., Ltd., said that since February, the monthly additional expenditure for steel prices has reached 2 million yuan, which is equivalent to last year’s monthly profit. The company has already incurred losses, but in order to keep orders Can only bite the bullet and continue to produce.

Under the "price hike", the impact is not limited to the enterprise side, but may also trigger inflation risks and affect terminal consumption. The interviewed companies generally said that the current product price increase is not universal, but the price increase of raw materials will definitely be gradually transmitted to the downstream, and it is likely to spread to various consumer areas such as daily use in the future, triggering inflation. The reporter learned from an interview that some food companies have implemented flexible price adjustments for products, and household appliance companies have also generally adjusted prices. In addition, some companies have increased prices in disguise by reducing volume without reducing prices.

Prices may be difficult to adjust in the short term, companies have multiple concerns

At present, when the price increase of raw materials can be called back has become the focus of attention of all parties. The industry viewpoints such as CITIC Securities believe that China’s industrial metal consumption accounts for the highest proportion. From a medium and long-term perspective, China’s demand side is the core contradiction of price changes. The current prices have fully reflected expectations, and the increase in industrial metal prices may be more space. limited.

Many people in the industry believe that the rise in raw materials such as non-ferrous metals and precious metals is caused by various factors such as fluctuations in the international political situation, the United States and other countries’ monetary quantitative easing policies, and the imbalance of supply and demand in the international and domestic markets. In addition to the contradiction between market supply and demand, as countries around the world continue to release "water", a large amount of capital has entered into bulk commodities, which has become an important reason for the rapid rise in prices. In the short term, such influencing factors cannot be eliminated for the time being, and the trend of raw materials running at a high level may be difficult to reverse quickly.

In this regard, companies have multiple concerns.

Raw materials continue to rise in price or run at a high level, and production or suspension of production is "losing evidence." Zhong Sheming, deputy general manager of a furniture company in Guangdong, said that if the raw materials continue to rise, the product will have to increase prices, but it may lead to loss of orders; and continued production will also lead to losses, and "lost evidence for advance and retreat."

Liu Shikun said that traditionally May is the peak season for the home appliance industry, and it is hoped that raw material prices will fall at this point. If it is still operating at a high level by then, it will have a serious impact on the entire industry, especially small and medium-sized enterprises, and dampen corporate confidence.

The industry shuffles or accelerates. Gao Shiwang, director of the Industry Development Department of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said that in this round of crisis, companies are facing the challenges of rising raw materials and logistics prices and rising exchange rates. Help enterprises to upgrade their industries. Peng Yuanyuan, general manager of a Chongqing Chemical (Group) Co., Ltd., said that the chemical industry has now entered a reshuffle stage, and small and medium-sized enterprises are struggling to survive. If they cannot respond effectively, many companies are facing bankruptcy, and they are eagerly looking forward to industrial upgrading.

Wu Wenquan, general manager of a (Zhejiang) Household Articles Co., Ltd., said that the current price increase of raw materials has put pressure on the company's operations. Once it encounters monetary tightening, the company's cash flow will become more stretched, and it will become more difficult. Large enterprises may still be able to survive, but small and medium-sized enterprises will find it difficult to overcome this difficulty.

Take multiple measures to hedge against the impact of price increases

In view of the fact that raw material prices may still remain at a high level in the short term, the industry has proposed a number of policy measures, suggesting precise measures in various aspects such as strengthening the balance of the international supply chain.

Improve the price supervision and price balance mechanism of bulk raw materials, and resolutely combat arbitrary price increases; at the same time, strengthen my country's procurement and supply capabilities in the field of international bulk commodities to ensure the safety and stability of the domestic supply chain. In response to the practical difficulties caused by the increase in the price of raw materials for business operations, many industry insiders suggested that relevant state departments provide timely and appropriate price subsidies for bulk raw materials such as non-ferrous metals to ensure the stable operation of key pillar industries.

The introduction of tax and fee concessions and other policies "combined boxing" to help companies reduce production and operation costs. Deng Zijin, deputy general manager of the General Manager's Office of an Anhui Automobile Co., Ltd., and others suggested that business tax, value-added tax and individual tax could be reduced in stages, and a batch of targeted loans should be accurately placed on entities.

Guide companies to use the futures hedging function to lock in forward costs and reduce the risk of uncertainty to a lower level. At present, this risk hedging tool is widely used in medium and large enterprises and listed companies, which also makes it hedging the impact of raw material prices to a certain extent. However, there are still a considerable number of companies that are not familiar with hedging. It is recommended to guide them to learn and use , To hedge the risks brought by rising costs.

Article information source-Economic Information Daily



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