How can plastic materials rise in price and how can they not go out?

For plastics companies, raw material costs play a key role in all costs. After July this year, the plastic raw materials market once again launched a fierce rise. Many companies believe that the rise in raw material prices will be the beginning of the industry's "shuffle". So, how can a plastics product company not be out of the game?

Plastic raw materials "Golden Nine" rose strongly

Polypropylene is a major raw material for plastic products. In August of this year, its price was rising step by step, and in September, it showed a kind of “not tolerant” momentum, and industry insiders said it “rises to doubt”. life". According to statistics, the price per ton of polypropylene rose from 7,900 yuan at the beginning of July to 9,500 yuan, a total increase of 1,600 yuan per ton, an increase of more than 30% compared with the same period last year.

“After the price increase at the end of last year, the plastic raw materials experienced a long-term correction in the first half of this year. The current market can be seen as a bottoming out. This wave just happened to catch up with the production season of Jinjiuyin 10, and many factories waited for the raw materials to go to the pot. Therefore, the impact is relatively large." Mr. Cheng, who sells raw materials in the plastics chemical market, said that there are many types of plastic raw materials rising, and the companies affected are also very wide. "Not only plastics for living, but also for industrial use." Plastic products companies have been complaining all the time."

Plastic raw materials are tight, entering the seller's market

According to many plastic raw material suppliers, recently, while the prices of plastic raw materials have risen, the supply of goods is also in short supply.

Recently, plastic raw materials have entered the seller's market. Traders and producers have lived relatively moist, not only the price has been pulled up, but also not necessarily in stock. In the raw material market, there is always a psychology of “chasing up”. This time, the raw materials have just emerged, and the finished products companies have increased the procurement of raw materials. Large enterprises have increased their inventory by increasing the amount of goods, and small enterprises have adopted high-frequency purchases, so that the supply is tightened.

Up or down, it’s difficult for SMEs

Many people in the industry said that, according to the truth, raw materials have risen, and the price increase of merchants is the easiest way to digest costs. However, this is not the case.

"Overall, SMEs do not have the advantages of R&D, technology, and crafts, whether they compete with large enterprises or compete with each other. More people compete for lower production costs." In the interview, Most plastics companies and dealers said that if they easily follow the trend, it means taking the initiative to abandon the competitive advantage of the price; if they insist on not raising the price, they will face the embarrassing situation of getting the market but losing profits.

Xiaobian learned that another deep reason for SMEs not to easily raise prices is that many SMEs need to solve the problem of insufficient liquidity through financial institutions or private financing. Under this circumstance, the prices of various raw materials will rise sharply, which will occupy more cash flow for SMEs. Once the company raises the price, it may increase the period of capital withdrawal due to product sales difficulties, which in turn affects the relatively stable capital chain of the enterprise.

How can I not be "washed" out?

Many enterprises have adopted measures such as technological innovation and management upgrades to improve the added value of products and strictly control costs.

In the past, the price increase of raw materials, our SMEs relatively reasonable approach is to increase the price of products in small increments and batches, and test the reaction of all parties in the water market. At the same time, the remaining production costs are offset by reducing profits. However, now our company should not only consider the issue of product cost, but also consider the process and other issues. For example, PC (polycarbonate) is more expensive, we can use other cheaper materials to improve the same performance, to solve the cost pressure for customers. The impact of rising plastic raw materials on enterprises is difficult to estimate, and some raw material prices have even risen by more than 50%. “At this time, low-cost competitive markets are useless, and low prices mean losses, or a decline in quality.” At this time, I would rather pick up some projects and develop some new materials.

There have been cases of “collective madness” of raw materials, and what followed was the industry’s “shuffle” again and again. If you don't want to be the one to be "shuffled", it's important to make a good future. Enterprises should either transform in time or make more efforts to actively increase the research and development of new products, new technologies and new processes, and tap the added value of products. Otherwise, passively responding to rising raw materials is likely to lead companies into a “dead end”.