Recent Price increasing Trend and Reasons in China

Recently，Raw material increasing news can be seen everywhere from friend’s blog to articles shared in foreign trade Industry. People even revised the lyrics of“Yellow River Cantata” to below version：“copper is howling，aluminum is crying，Zinc is laughing, Tin is jumping, IC is croaking, rubber is roaring, copper aluminum price high, iron price is rising, Delivery also increasing , plastic material have fever, paper carton follow to join the fun”.

Then, what cause the sharp rise ?

1. National Policy.

Duo to the reform of supply side and persistent effort in environmental protection. Unqualified factories of 16 Industries such as Papermaking, electricity an and Iron Industry are closing step by step. Those lead to rapid decline in production capacity, supply short led to rising raw material prices.

SAP, fluff pulp, nonwovens are ushered in this year's substantial price increases. In which non-woven fabric prices increase by nearly 60% from June to now, it almost got to the situation of no goods even though you have money. Price of another non-woven fabric raw material PP is also increasing crazily, it almost out of stock.

2. International oil production dispute

From June to November, OPEC meeting have been discuss restrictions on the country's crude oil production, news release in the short term caused a certain rise in crude oil prices, but during the period because countries agreement haven’t reached yet, this round of oil prices are still in shock. as for the future, situation is not clear. But we can assert that once the international agreement on oil production, crude oil prices will inevitably rise again.

3.Labour cost increasing 

Although minimum wage standard has increased greatly in nationwide, Due to sharp aging speed of population, labours are extremely lacked especially cheap labour force. Even enterprises increased welfare to keep workers. labour shot in Chu Chiang Delta are still severe. That’s mainly caused by the hug gap of high living cost and low wage. Many labours back forwrd to inner cities. In this situation, increasing of production cost is an inevitable trend.

4.Packing cost increasing

Because pulp, straw pulp prices increase and papermaking enterprises rectification, small workshops were closed, only several large domestic enterprises to support the country's raw material demand is almost impossible. Is no longer difficult to understand the price increasing.

5. logistic fee increasing

Since the carry out of “Regulations on the administration of highway for overload transport vehicles” from 21th September, charging standard of logistic industry start increasing. Those cause the increasing of commodity cost. Luckily, the increase of delivery cost are still in acceptable range. So I highly recommend enterprises who have purchasing plans place the order in advance to avoid the purchasing and delivery season.

Although raw materials are increasing crazily, We Golden Future Enterprise will not increase the price suddenly. To all the cooperated partners, quoted price will not increase in validation period, and we will advance you in advance for price increasing.