Raw material prices impact on the business of metal cutting tools

    Since December 2015, the domestic carbide material price increases as high as 40% to 60%, foreign materials also rose 20% -30%, prices of raw materials for some tool enterprises have a great impact.

Specific analysis of the following points:

1, do not pay attention to product quality corporate

These companies tend to be a number of new small businesses, low value-added products, there is no high-quality customers, there is no inventory, it does not have the market competitiveness. When the wave hit raw material prices, they will be the first to feel the pressure on prices, coupled with the large environmental pressures of inflation and the credit crunch, these small companies often choose to use low-end material instead of smuggling, seq charged. Thus in order to reduce the quality to achieve short-term interests must make enterprises to decline or extinction.

2, wait enterprise

These companies have some development, some high-quality customers, but the lack of long-term business planning, vicious competition seriously. Most companies are provided with a certain amount before the stock price, in the face of continued price increases of raw materials, they choose to compress their profit margins and retain large customers, waiting for the market after the buffer, and then re-enter the market. For some small customers will not choose the compression market orders, or shoddy.

Wait enterprises to withstand continuous price increases, their old customers currently receiving the price bottom is about 20%, due to the value-added products is not high, some companies said, "If there is a 30% profit last tool, the same year How much material do is profitable. "

3, focus on brand business

Prices of such enterprises treat optimistic, opportunity prices for them, it is a development. Fujian Nan’an Boreway Machinery Co., Ltd. , said the price is not very big influence on me, I'd want it to go up. Brand is an intangible asset, but also the common language of the international market. Brand is the soul of the product, product spokesperson, is the key to not smoke in the battle to decide the outcome. Sublimation enterprise must leap from product to brand.

4, well-known foreign companies

Known foreign companies suffered less impact because it would have higher value-added products, profit margins large, there is not much impact on raw material prices, their customers are high-quality customers.

For this phenomenon, the experts explained that this is an inevitable development. Every rose or fell will promote the industry reshuffle, need not nervous. Only products made features, improve product quality, high value-added products that will not have much impact. Low-end products, mainly to run the amount will be greatly affected, and even collapse. Every SMEs collapse, its production capacity will be like a big business move closer. Experienced changes in the market, with specialty products and the development of enterprises in talent, technology, products, brands, management and other aspects of accumulation, so that enterprises more competitive, capacity will gradually move closer like these companies. Not core competencies of new enterprises will be phased out in the industry reshuffle in the market.

Development of an industry, is the embryonic stage to the explosive growth stage, and then through a second industry reshuffle, screened a competitive business, which is the development of the law. Such prices, but on the development of the industry can promote, promote industrial restructuring and upgrading.