Raw Material Crisis

Since the second half of last year, the crisis of rising raw material prices triggered by excess liquidity and changes in the supply-side structure has begun to sweep the country.

From June last year, domestic commodities have continued to rise. According to CCTV Financial Report: copper rose by 38%, paper rose by 50%, plastic rose by 35%, aluminum rose by 37%, iron rose by 30%, glass rose by 30%, zinc alloy rose by 48%, stainless-steel soared 45%, IC rose 100%. Coming into the end of February, the costs of raw materials were utterly out of management, and that they jumped wildly by 20% and 30%.  Some specialty papers even jumped by RMB3,000/ton at a time!

The categorical price increases of industrial raw materials like plastics, textile materials, copper, energy, electronic parts, industrial base paper, etc. , it utterly discontinuous the assembly plans of terminal whole 

makers. Several production lines were forced to press the pause button, and varied bulk commodities went up wildly. One price per day for raw materials has caused companies to be unable to control costs, and production and operation are in chaos. For the current domestic consumer demand is seriously inadequate,

 and enterprise’s high debts in China’s producing trade, its destructiveness is fatal. Some giant and medium-sized companies are forced to balance risks through the futures market or hoarding raw materials. However, the speedy rise and fall of prices have caused serious losses for the companies, and some even quickly plunged their operations into trouble.