A sharp rise in raw materials

Affected by the 2020 epidemic, the prices of various industrial auxiliary raw materials have been rising, including metal materials such as steel, copper, iron and aluminum, chemical materials such as crude oil and asphalt, energy sources such as coal and natural gas, and packaging materials such as wood, sponges and cartons. Price increases are 35% to 45% (copper 38%, aluminum 37%, zinc alloy 48%, stainless steel 45%).

What is the reason for the high price of raw materials?

1. Affected by last year’s epidemic, production capacity was limited, resulting in a shortage of some raw materials, and conflicts between supply and demand at home and abroad led to a rise in prices, mainly steel and other metal materials.

2. Price rigidity factors lead to a rise in the price of raw materials, such as the rigidity of labor prices.

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

Who is under the pressure of price increase?

For the industrial automation industry, the first to bear the brunt of the rise in the price of raw materials is the machine tool industry. The machine bed, pillars, bearings, cutting tools and other parts are made of steel, hardware and other metal raw materials, and these raw materials are the most ferocious. In the face of the menacing price rise, the downstream machine tool industry, especially small and medium-sized machine tool enterprises, have to make a notice of price adjustment in order to reduce costs and increase profits.

Will the price continue to rise?

At present, the epidemic situation at home and abroad has been brought under control, the situation has improved, various industries have resumed normal production, and the prices of industrial raw materials will fall slowly. It is expected that the trend of raw material prices will show a trend of first high and then low in 2021.

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