Raw material prices have risen sharply

The reporter noticed that the current raw material market continues to rise, which can be seen from the continued high operation of the price index in February: On February 28, the National Bureau of Statistics released data showing that due to the continuous upward impact of international commodity prices, the purchase price of major raw materials this month The index is 66.7%, higher than 60.0% for 4 consecutive months. From the perspective of the industry, the purchase price index of major raw materials in petroleum, coal and other fuel processing, ferrous metal smelting and rolling processing, non-ferrous metal smelting and rolling processing, electrical machinery equipment and other industries all exceeded 70.0%, and the pressure on corporate procurement costs continued to increase . At the same time, the increase in the purchase price of raw materials helped to increase the factory price. The factory price index this month was 1.3 percentage points higher than the previous month, at 58.5%, which is a relatively high level recently.

As international crude oil prices continue to rise, the prices of plastic raw materials have also risen. International crude oil prices have continued to strengthen since the beginning of this year. Statistics show that on February 26, 2021, Brent and WTI oil prices closed at US$66.13 and US$61.50 per barrel, respectively. For more than three months since November 6, 2020, Brent and WTI have risen like rainbows, with the rate reaching as high as 2/3.
The increase in the price of raw materials will have a direct impact on the production and operation of enterprises. Driven by profit motives, companies always hope to transmit the impact of rising raw material prices to users. However, whether this idea can be realized depends on the company’s ability to control product prices. In the current overall oversupply market environment, product market competition is under great pressure, and it is very difficult for companies to increase prices, which means that it is difficult for companies to transmit the adverse effects of rising raw material prices to users; therefore, affected by this, companies’ The profit margin will be compressed due to the increase in raw material prices.
Enterprises themselves must also do something. The aspects of the enterprise itself are mainly manifested in three aspects: first, small and medium-sized enterprises themselves must find ways to tap the potential of internal cost savings, and realize cost savings as much as possible; second, start from a design perspective and find alternative low-cost raw materials; third, Explore and promote product upgrades to respond to the pressure of rising costs with deep processing and high value.