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Since late September, with the decline of global economic growth, the prices of steel, non-ferrous metals and crude oil have all dropped significantly. It is reported that domestic steel prices showed the biggest decline in 10 years in October. All kinds of steel products fell by more than 20%. The average domestic steel price in October was 4,739 yuan / ton, down 16.4% from September. The price of crude oil to November 19 was $54.47 per barrel, which was about two times higher than the high price of about $147 per barrel in the first half of the year.
It stands to reason that in the first half of this year, companies that have suffered from rising raw material prices and rising cost pressures should be relieved, but this is not the case. Many business executives said that the price of raw materials such as steel fell, which has obvious impact on alleviating the cost pressure of enterprises. However, due to the rapid rate of slowdown, it has brought a lot of losses to enterprises in the short term.
Inventory pressure business is difficult to bear
As early as when steel prices rose, we rushed to purchase goods. Three months ago, the price of copper was up to 7,000 yuan a ton, and now the price has fallen by half. Our warehouse has a stock of several million yuan of steel, so we calculated that in just over a month, we lost millions of dollars in raw material inventory. For the recent market price of raw materials such as steel plummeted, the relevant person in charge of a lighting company in Zhejiang complained.
When the price of raw materials continued to rise, we suffered from cost pressures. Now we suddenly plunged and we are still suffering. Lighting electrical enterprises represented by Foshan Shunde enterprises have reported to reporters that they are currently under tremendous pressure from the inventory backlog. Some companies said that the goods that had been desperately saved because of the fear of rising steel prices have become the biggest burden, which may make it difficult for enterprises to maintain normal operations. Some weak enterprises are affected by the current economic downturn and their own risk of capital chain. If there are more stocks, they will face serious financial losses and face the crisis of bankruptcy. What is most worrying to the industry is that the lighting industry is generally in a downturn, and this event has undoubtedly increased the difficulty of corporate decision-making.
Price adjustment has become a hot topic in the industry
Enterprises are also under pressure from merchants while suffering from inventory pressure. It is understood that many companies in Zhongshan have encountered complaints from merchants recently. Most of the merchants pointed out that the price of raw materials has dropped. Why is the price still not falling? The general manager of Sichuan Xianghua Materials Co., Ltd. Kong Xiangyu is the most representative, he said When the raw materials rise, the manufacturer will increase the price of all the products. When the raw materials fall, the manufacturers of the lighting industry have no reflection. The original price of steel in the market is more than 6,000 yuan a ton, and now it is more than 3,000 yuan a ton, which is unreasonable. Mr. Kong said that his company is currently communicating price issues with the cooperative manufacturers, and plans to send someone to the factory to talk about price cuts in the near future.
Although most lighting companies have not adjusted product prices, some companies have begun to introduce some rectification measures. For example, Delixi has sent a fax to each customer, indicating that if the price adjustment, it will compensate the loss of the business. According to Liu Huanong, the person in charge of the Changsha Dengguo Franeng franchise store, because his current brand is Langeng, he is not worried about the price adjustment, because responsible manufacturers like Langeng will definitely consider the business. .
Raw material prices will also likely call back
At the same time, many businesses are beginning to worry that price adjustment will bring their own inventory burden. It is understood that some large-scale businesses currently have a lot of inventory, if the manufacturers adjust the price, it will bring them a small burden, the original high-priced products, will face the risk of selling at low prices. Chen Yi, general manager of Kata Lighting, said: For the brands we do, although the prices of raw materials are fluctuating, the price adjustment of products is not the most important. We are pursuing the quality of brands and after-sales services. I think manufacturers Not adjusting the price is good for our agents, which reflects the status and value of our brand. If the manufacturer adjusts the price of the product, my inventory will definitely be affected. I hope that the price range adjusted by the manufacturer should not be too large.
Cai Ganqiang, chairman of Foshan Shunde Benbang Electric Co., Ltd. said that from the market analysis, this round of raw material price adjustment is a natural change in market prices, and may also be adjusted back. Therefore, maintaining the relative stability of the enterprise market price system is just as important as maintaining the stability of the stock market and the property market. Enterprises and businesses must adjust their mentality and focus on maintaining market stability. At present, the most important thing is to maintain confidence. Industry players must understand each other and strengthen communication in order to tide over the difficulties together.
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