The rising price of raw materials is only the beginning. The terrible thing is that the manufacturing enterprises have stopped production and closed down!

Abstract Recently, raw material prices have continued to soar, mainly due to the following factors: the shutdown of large factories, some of the construction load, coupled with considerable production and sales of terminals, positive procurement, reduced social inventory, and short supply. The price increase of raw materials is only the beginning, many small and medium-sized enterprises will also face raw materials tight...

Recently, raw material prices have continued to soar, mainly due to the following factors: the shutdown of large factories, some of the construction load, coupled with considerable production and sales of terminals, positive procurement, reduced social inventory, and short supply.
The price hike of raw materials is only the beginning. Many small and medium-sized enterprises will also face six major crises such as shortage of raw materials, environmental protection and production capacity, more complicated foreign trade environment, expansion of production of powerful overseas enterprises, and slow sales of funds and products. collapse.
This price increase can be said to be another suspension of production and closure after the environmental storm this year. Due to the transmission of raw material prices, the market has been able to clearly feel that the atmosphere of price increases is very strong. It stands to reason that the rise in raw materials affects every enterprise, and it is the same as the rise of everyone. But why is the price increase of small and medium-sized enterprises different from the price increase of large enterprises?
There are three main reasons:
(1) The raw materials of large enterprises use futures, while the raw materials of small and medium-sized enterprises are generally purchased at present. Due to the large demand for raw materials of large enterprises, it is difficult for a single raw material supplier to satisfy all of its raw material supply. Therefore, the general large enterprises The raw materials are all using futures. Futures trading can reverse the process of spot trading, that is, no goods can be sold first, and no goods can be bought.
The characteristics of futures trading enable large companies to purchase raw material suppliers' stable raw material supply in the next few months before the price increase, greatly reducing the impact of rising raw material prices on enterprises; Less, limited funds, generally used to buy first, so that the resistance to raw material price increases is very weak, raw material prices have risen sharply, prices must also rise significantly to meet production costs.
(2) Large enterprises have high added value of raw materials and have strong ability to withstand price hikes. In the past, large enterprises have mastered the mid-to-high-end market with advanced technology and high-end manufacturing. SMEs can only seize the low-end market with low prices.
However, the profits of the same products are not the same. The reason why high-end products are sold so expensive is because their technology investment, manufacturing process upgrade, brand building and other cost inputs account for an important part of their product costs, while raw material costs The proportion of raw materials is relatively small, and the price of raw materials is relatively low. The prices of small and medium-sized enterprises are relatively cheap, and the cost of raw materials accounts for a large part of the cost of their products. Therefore, the prices of raw materials have soared, and their prices have soared.
(3) Large enterprises have sufficient funds and good reputation. Large enterprises also have a great advantage in terms of capital, and the bank's reputation is relatively high. They can have sufficient cash flow to cope with this price hike. On the contrary, most of China's SMEs rely on banks to borrow money to build factories. They are also burdened with huge amounts of principal and interest repayments of banks, and relatively few in terms of liquidity.
Therefore, the negative impact of this price hike on SMEs is very large, and it is very likely that it will lead to the early stage of the collapse of SMEs.
Survival crisis for small and medium-sized enterprises <br> Shortage of raw materials: foreign raw material manufacturers have raised prices, and domestic environmental pressures due to a large number of small and medium-sized raw material producers have been closed. This price hike continues to hit, raw materials skyrocketing, the prices of all walks of life continue to rise, the market is so abused, many companies said that there are orders now do not dare to pick up! Don't talk about the price in the future, the shortage will be called the normal state, your supplier has the goods for you, is the biggest success!
Large enterprises can guarantee the stable supply of raw materials through long-term supply contracts and establish their own raw material bases through futures and supplier giants, while the supply of raw materials for SMEs is difficult to guarantee. On the one hand, the supply of raw material suppliers is mainly large. Enterprises, on the other hand, small and medium-sized raw material producers have been shut down in large numbers, and the rest are difficult to guarantee so many demands.
The production cost is high and the market share is small: large enterprises are not only built to avoid anti-dumping, but also to increase production capacity by using foreign raw material production, cheap labor, technological advantages, etc., to seize the foreign market and obtain a broader development space. As some large Chinese companies set up factories in Thailand, Vietnam, the United States and other countries, we can see that the capacity of large enterprises to build factories in foreign countries can meet the needs of foreign markets, and maintain the domestic small and medium enterprises by building factories abroad. Price and policy advantages.
In the future, the steps for Chinese companies to set up factories abroad will be accelerated. The United States will implement a double-counter tax rate. The survival of export-oriented SMEs will be even more difficult. This is why the establishment of large enterprises overseas will also bring crisis to SMEs. Because there are so many demand in overseas markets, it is estimated that the planned production capacity of Chinese companies overseas can meet the needs of overseas markets. Therefore, the market space for re-exports to overseas markets in China will become smaller and smaller.
Difficulties in capital and risk of unsalable products: As the prices of raw materials continue to rise, companies need to pay more for the same raw materials. For a long time, some SMEs have relied on bank loans to survive, and the company’s liquidity is insufficient. It is also difficult to borrow from banks, and financial difficulties are the key factors leading to the collapse of enterprises. In the future, small and medium-sized enterprises will face a situation of slow sales of products, because most small and medium-sized enterprises win the market by virtue of price advantage. However, after the price hike, the SMEs increased their prices substantially, and the highest price increase reached 45%, while the price increase of large enterprises and foreign brands remained at around 10%.
The price hike has narrowed the price of low-end products and the price difference between mid-to-high end. More and more consumers will give up low-end products without price advantage when they choose products, and they will spend more money to buy high-end products. Coupled with foreign anti-dumping, export blocked and other factors, the future SME products will face the possibility of slow sales!

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