It is generally believed in the industry that this round of raw material price rise is mainly caused by the following reasons:
1. Due to the impact of overcapacity reduction, some raw material production capacity is insufficient, the gap between supply and demand is enlarged, and the supply shock leads to the price rise, mainly due to the price rise of raw materials of steel and other metal products;
2. As the environmental protection policy continues to be strengthened, the overall market supply is tight, which is expected to increase the price of raw materials;
3. China’s ability to acquire global resources is still insufficient, for example, iron ore and other related industrial raw materials are imported from abroad.Affected by the epidemic, overseas major mines (iron ore, copper, etc.) have reduced production. With the gradual stabilization of the epidemic in China, market demand has begun to recover, leading to the situation that supply falls short of demand, and it is inevitable that the price of raw materials will rise.
Of course, when the epidemic is under control at home and abroad, the price of industrial raw materials will fall slowly. It is estimated that in 2021, the price of raw materials will show a trend of first high and then low.
As a pillar industry in China’s national economy, the steel industry is closely related to various industries, because the steel industry has a large monopoly and the price rises tend to transfer the cost pressure to the downstream industries.
Construction machinery as the downstream industry of iron and steel enterprises, the industry itself has a huge demand for steel, and the price of steel is bound to aggravate the production cost of construction machinery industry.
Steel is an important material in construction machinery products. The rise of steel cost will directly increase the factory cost of products.For construction machinery products, the general direct use of steel will account for 12%-17% of the cost of the product, if the engine, hydraulic parts and supporting parts, will reach more than 30%.And for China’s larger market share, with a large amount of steel loader, press, bulldozer series, the share of the cost will be higher.
In the case of relatively moderate rise in steel prices, construction machinery enterprises through internal potential, improve labor productivity and other ways to resolve the pressure of rising costs. However, since this year, the construction machinery industry is facing a sharp rise in steel prices, which has posed a greater challenge to the ability of enterprises to transfer cost pressure.Therefore, most construction machinery manufacturers are sensitive to steel price changes.With the consumption of the low-price steel purchased in advance by enterprises, the cost pressure of many construction machinery manufacturers will rise significantly, especially the sub-industries or companies with low concentration, fierce competition, low added value of products and difficult to pass on the cost will face greater pressure.
Post time: Apr-12-2021
