Raw material prices, affecting all walks of life in China, the plastics industry has not been spared. A large number of small and medium enterprises in this wave of downtime, closure, the plastics industry usher in a new round of reshuffle.
As small and medium enterprises on the demand for raw materials, subject to financial pressure, the general is now used to buy. Raw material prices rose, leading to higher production costs simultaneously, while the raw material prices in the proportion of its product cost larger, small and medium enterprises competitive advantage of product prices can not be highlighted, can only follow the surge in raw materials.
And large enterprises generally use futures procurement, by the impact of raw material prices will lag a few months, to avoid the price rise due to raw material prices caused by the risk. In addition, the cost of raw materials for large enterprises accounted for a relatively low proportion of their product costs, with advanced technology equipment and better service to obtain greater profit margins. At this point, small and medium enterprises of low-end product prices and scale of enterprises in the high-end price difference narrowed, more and more consumers in the purchase of products, will tend to choose high-end products.
Prices rise, lack of supply capacity
Because raw material prices continue to rise, small and medium enterprises need to raise prices in order to meet the rising costs, but can not guarantee on time delivery. And large enterprises through futures procurement and supplier giants signed a long-term supply contracts, or to establish their own raw material base to ensure the stable supply of raw materials. At this point the customer turned to new suppliers, that is, more suppliers to ensure that the supply of large enterprises.
Raw material prices, capital flow pressure mountain
Most of the domestic small and medium enterprises are relying on bank loans, policy support to establish, compared with large enterprises, the lack of liquidity, bank credibility is relatively low. In addition, the recent environmental impact of the storm, the renewal or the acquisition of environmental protection facilities to become a new cost burden of enterprises, small and medium enterprises capital flow pressure mountain, cash flow of small and medium enterprises are facing a large risk of collapse.
Raw material prices brought about by the industry reshuffle, but also to the SME managers to bring inspiration: rely on a simple low-cost, low-end products, it is difficult to resist the impact of market changes. Small and medium enterprises are the biggest victims.