China's hardware industry "out of the circle" raise the threshold

The rising prices of raw materials are not completely destructive to the industry, and its positive significance is particularly far-reaching. Some large companies have reflected that raw material prices are floating within a certain range, which is conducive to industry capacity, reintegration of industries, reshuffle, and adjustment of product prices. It has been a challenge for Chinese enterprises to go through low thresholds for many years of industry entry and compete at low prices. It's a waste of resources and it's not a bad thing - Recently, Zhang Dongli, chairman of the China Hardware Products Association, said in an interview with the author that the change in the price of metal raw materials has become more rational. Looking at the hardware industry, it is not difficult to find that raw material prices have skyrocketed. The industry has not been defeated, but has gradually emerged as a positive outlook with faster elimination of the fittest and new products emerging in an endless stream. China's metal raw materials market experienced a turmoil in prices, and the hardware industry was the first to suffer.

Low-price competition leads to “high quality and low price”. According to reports, the price increase of metal raw materials began two or three years ago at the international level. Initially, it was only in a slow-growth state. Most companies are able to accept the sudden price of metal raw materials represented by copper. Soaring, the price of some raw materials has increased several times in almost a month. The rate of price increase has caused many companies in the industry, especially hardware companies that have long been profitable for low cost and low prices.

Normally, prices should be moderate, and the low prices of raw materials, finished products, and even circulation are actually economic damages. Experts in the industry pointed out that at that time, there were many companies in the industry, but due to the low cost and fierce competition, most companies were relying on lowering the price of their products to obtain the market. As a result, corporate profits fell to a very low level, basically only reaching A state that can maintain production, but it is difficult to make money, results in low product prices, low added value, and low profits. As a result, companies do not have enough funds to maintain sustainable development. Difficult to improve, leading to unsatisfactory or inferior.

However, in fact, good prices and low prices are not good for the healthy growth of production companies. Low prices will inevitably mean low profits, low profits will inevitably lead to low investment, and it will be difficult to guarantee the development of the company. At the same time, low prices in the international market is almost synonymous with low-grade, to improve product quality, grade must first increase product technology content, with independent patents, design, and change to high quality and high price product image. One of the evil consequences of low-price competition to Chinese hardware products is that it has long been known in the international market as a “good and cheap” image.

After the increase in product cost, Chinese hardware companies attach importance to innovation, increase the technological content of products, and raise the selling price accordingly. This will increase the image and quality of Chinese products in the international market and embark on the road to higher prices and better prices. All have very great significance. Rising prices guide companies to "higher prices for better quality," and raw material price increases are not unexpected events, but have brought the Chinese hardware industry an opportunity to upgrade.

The sequel to the Chinese hardware in the era of deflation still affects the industry. Some companies now need to raise prices, but they have not been able to keep up, because in the past few years, because of low costs and low prices, they have caused consumers to feel low-end in the industry and enterprises. Today, they have to raise prices. Consumers and sellers instead Do not accept, do not buy it. According to industry sources, raw material prices have risen and product prices have risen accordingly. Products have added value. Good companies can increase value-added and digest costs through management, new product development, etc. At the same time, new product development can also help companies raise prices and increase profitability. However, for a good company, price increase can still be accepted, especially for the introduction of new products, domestic and foreign customers are accepted, but the premise is that there are brands, quality, technical content of that part of the company.

Raw material price increase is not a short-term behavior. The increase in raw material prices is the first reflection of economic laws. Changes in supply and demand lead to different trends in product prices at different stages. The recovery of the global economy and the continued strong growth of the Chinese economy are the underlying reasons for the rise in the prices of metal raw materials. Many companies report that orders are now too many to come. Small businesses often do not dare to answer, but large companies are like fish, and they can meet customer demand in terms of supply cycle, production capacity and product quality. There is also room for negotiation on prices. Raw material prices have become a good opportunity for enterprises. An upward trend has been formed. This was totally unthinkable during the period of deflation three years ago.

Without a solid amount of money already entering the industry, it is actually raising the bar. Changes in the market environment have produced a series of positive effects on the industry. “Getting out of the lap to raise the threshold” Some small, uncompetitive enterprises have gradually withdrawn from the market, accelerated the industry reshuffle, and raised the threshold for the industry. The industry has always had a desire to achieve survival of the fittest, increase brand concentration, and accelerate industrial upgrading through competition. However, this is only because we have been saying that it is useless, and this time, raw material prices, changes in the market, and the industry The subjective awareness of the project actually accelerates the realization of this desire and solves the problem that the industry has long been overshadowed by unsatisfactory results. At present, small enterprises with no strength are gradually withdrawing, good companies are getting better and better, and the competition is more benign, which is conducive to industrial adjustment and the survival of the fittest.

The price slump during the deflation period has become history. With the development of China’s industrialization and manufacturing, the increase in raw material prices is not a short-term behavior but a development trend under the law of the market. Under the influence of this environment, China’s hardware industry It will also enter the period of virtuous cycle with better quality, better prices and better survival. Some experts said that the continued decline in the price of raw materials is not normal, and the entry cycle is the result of market rules. He also said that now the industry has conditions for structural adjustment and innovation. For a long time in the future, if the environment remains unchanged, the industry will really reshuffle, good companies will get better and better, poor companies will withdraw, and they will really play a role in the healthy development of the industry.

Cap Mould

Pipe Fitting Mould CO.,Ltd ,