Mold Industry 'pressure Mountain' - Material Prices Rise, Cost Increases

- Jun 22, 2018 -

Basically, the entire manufacturing industry will be directly affected by the price of raw materials in the upstream, and the mold industry will bear the brunt of it. In recent years, due to the increase in mineral prices and the increase in the cost of labor, transportation, and land prices, the price of raw materials has been rising, and has remained high.

The mold industry, which is highly dependent on raw materials, was the first to receive an impact. Rising raw materials meant that the production costs of the mold manufacturing companies increased. Cost competition can be said to be an important competition among companies. Under the pressure of corporate operating costs, reducing marketing costs may become one of the options for companies to reduce operating costs. Due to the changes in the prices of raw materials, many mold manufacturing companies are insured or even lost a large amount of orders before the completion of the loss, the company's cash flow and development has caused a heavy blow.

On the other hand, rising raw material prices are a double-edged sword for companies and industries. From the enterprise level, the rise of raw materials is not a rare opportunity for those high-quality enterprises that are more scientific, leaner, and more efficient in management. The product structure of these companies is relatively reasonable, and the proportion of high-value-added products is relatively large, and the products have certain technical barriers, are not easily copied, and have advantages and competitiveness in terms of prices. On the contrary, the rise of raw materials will also speed up the elimination of low-end and low-quality companies. For enterprises with extensive management and serious product homogenization, it may be a disaster. In the earlier period, due to the large market demand for coated abrasives and the low barriers to entry, some companies originally relied on low-price competition strategies and struggled with modest profit margins. Under the current situation, there is no order, and orders have become more rampant. It will be even harder to eat all the material costs of rising margins.