Who is driving the soaring price of raw materials?

With the gradual stabilization of the epidemic and the pace of manufacturing production on track, starting from the second half of 2020, domestic industrial basic raw materials have ushered in an all-round rise.

Metals, crude oil, chemical materials, iron ore, coal and other raw materials have risen in price. The pressure from upstream "price hikes" is transmitted to downstream machinery, parts, and chemical industries, and has varying degrees of impact.

In view of the fact that 38 products in the upstream supply system of our company have continued to increase in price, and more than 67% of raw materials have increased in price by more than 40%, our company will make reasonable adjustments to the prices of all products on April 15, 2021. The rate of increase is controlled within 5% to adapt to consumers’ acceptance of price increases.

Who is driving the soaring price of raw materials?

The industry generally believes that this round of raw material price increase is mainly caused by the following reasons:

   1. Affected by capacity reduction, some raw materials have insufficient production capacity, the gap between supply and demand has increased, and supply shocks have caused prices to rise, mainly due to the price increase of metal products such as steel;

   2. Environmental protection policies continue to strengthen, and the overall market supply is tight, which is expected to drive up the price of raw materials;

   3. my country's global resource acquisition capacity is still insufficient, such as iron ore and other related industrial raw materials imported from abroad. Affected by the epidemic, major overseas mines (iron ore, copper mines, etc.) have reduced production. As the domestic epidemic has gradually stabilized, market demand has begun to recover, leading to a situation where supply exceeds supply, and raw material prices are inevitable.

   Of course, raw materials will not continue to rise. When the "price increase tide" comes, Crack will review the current situation and take a long-term and development perspective to calmly deal with the storms and challenges.