In-depth analysis of the major reasons for the price increase in the valve industry :
1. The problem of shortage of raw materials
The industrial chain of the valve manufacturing industry, including material suppliers, equipment suppliers and some specific application areas. Each subject of the industry chain determines the profit distribution of the entire industry chain through a process of continuous negotiation and bargaining. From the perspective of upstream raw materials, the most important raw materials for valve product manufacturing are steel materials and copper materials, whose costs account for about 70% of the main operating costs of valve manufacturers. Any change in steel will affect the quality and cost of valve manufacturing.
Beginning in May 2021, Sino-Australian relations have become tense. Australia unilaterally stopped exporting iron ore materials to China.
As the price of iron ore rose by 71.5%, it caused a substantial price increase in steel companies. As a relatively high industry valve industry, it has brought a series of chain responses.
2. The impact of the electricity curtailment policy
In October, the Chinese government introduced a curtailment policy for high-power-consuming and energy-intensive enterprises, which led to a reduction in the efficiency of factory production and an increase in production time. In order to maintain the profit of the factory, it had to increase product costs. Because of this policy, the production delivery time of the general factory has also increased by 2/3 compared with the original, which makes many buyers feel great confusion and pressure. It is also worth noting that the different implementation efforts of the governments in various cities in Zhejiang Province have led to different periods of power rationing in different cities.
3. The epidemic has affected the continuous increase in ocean and air freight costs.
At present, foreign epidemics are repeated.
The shortage of shipping containers and port congestion have led to the rise of container prices, which has led to rising shipping costs.
At the same time, overseas shipping and air transportation channels are also unstable. In addition, the epidemic prevention and control testing of export goods is strict, and the shipment volume is In the case of growth, there has indeed been an extension of the time limit.