Raw Material Price Increases To The Impact Of The Cable Industry

By Paul Hu

China Electrical Equipment Industrial Association, in its first quarter 2010 economic operation of electrical equipment industry is mentioned: “As the world economic recovery and stronger demand for basic raw materials, rising long-term future trend of prices of raw materials had been basically determined, there is no special unusual possibility. electrical industry by the great impact of raw materials, above all, high demand, especially for steel, copper, aluminum and silicon steel demand is greater; In addition, low value-added products, prices for raw materials also sensitive. ”

In the first half, to power equipment manufacturing industry, the main raw material of copper, aluminum and silicon steel sheet is typical, prices of wave after wave of waves. In addition to cold-rolled non-oriented silicon steel and a few other materials, the recent slight decline in prices, other such as copper, aluminum, magnet wire, and other basic raw materials and large diameter boiler tubes, special section tube, pipe and other special steel alloys are in a high state prices increased the company’s cost pressures.

As copper, aluminum, silicon steel and other raw materials in the low-voltage electrical appliances, wire and cable, transformers, medium and small electric motors and other products based on the preponderance of cost structures, such as wire and cable products, raw materials, the total cost of more than 80%, in transformer products share of total costs, costs of materials are also more than 70%, the prices of raw materials caused a substantial basis for electrical products such costs sharply. Some analysts believe that prices of 10% silicon steel, transformer costs will increase 3.8%; 15% copper and aluminum prices, the cost impact on the transformer, respectively 4.2% and 4.5%. With energy prices, transportation costs and the rising cost of human resources, also contribute to its cost further increased.


Upstream raw material prices to the business of the stress is very significant. Since 2005, overall gross margin of power equipment manufacturing industry, the basic trend has been declining. Transformer is 10 years ago, the average profit margin of 22%, and now only about 5% to 6%.

Raw material prices, product price hike is inevitable, but the current power equipment manufacturing industry, a reasonable sales price is difficult to upgrade. Especially in the technology and low added value products in the low-end market, lower price Competition of the situation is quite common in some of their losses electrical equipment manufacturers. The fundamental reason for this situation is that blind investment and overcapacity, oversupply.

On the one hand, because the investment threshold, resulting in the influx of a large number of enterprises, resulting in industry enterprises excessive. It is understood that only the power transformer manufacturers on more than 1,000 conservative estimate, the size of wire and cable industry is up nearly ten thousand companies as much. Beyond the capacity of these industries demand, a serious surplus. On the other hand, due to low threshold, not only becoming less and less concentrated industries, but also a part does not have the capacity, quality control and testing and other means necessary? Quot; workshop enterprise “to blend into the industry, and has become fake shoddy, shoddy, shoddy work, shoddy products, generate sources and by virtue of depressed selling prices and other means to disrupt the market competition order, aggravated disorderly competition within the industry.

But every coin has two sides, raw material prices to the impact of the power equipment manufacturing industry is true. The short term, enterprises will therefore double the pressure, but long term, substantial increase in raw material cost pressure, electrical equipment manufacturers will be further divided. Small-scale production, product technology behind the manufacturing enterprise, the lack of economies of scale and core competitiveness, it is difficult from the market stable supply of raw materials, production costs difficult to control, corporate profits will fall sharply and even losses, and eventually eliminated from the market . The core technology and a certain scale have the power equipment business, will be through the production of high value-added products, mass production to lower cost, digest raw material prices pressures, and usher in more scope for development.

About the Author: I am a professional editor from China Manufacturers, and my work is to promote a free online trade platform. contain a great deal of information about motor run capacitors,used komatsu excavator,rotato, welcome to visit!


Permanent Link:

Back To Top