The price of bare copper has been rising all the way, who will rescue the insulated wire companies that "sell at a loss"?


[Big Bit Guide] Since the beginning of this year, the prices of various raw materials have continued to rise, which has severely hit the physical manufacturing industry. Insulated wire companies are mainly trapped by the prices of raw materials such as plastic pellets and bare copper wires.

  Magic In 2020, the price of bare copper is going up all the way, and there is no "wu morality"! It is a great blow to both terminal manufacturers and upstream insulated wire companies.

   The rise in copper prices affects many power supply and home appliance companies that demand more copper, copper wires, and power cords. Of course, other industries that use more copper wire are also not immune.

   For home appliance companies such as Galanz with annual revenues of tens of billions, Xinbao and Omar, with annual revenues of tens of billions, they have a certain buffer space when costs rise. For small and medium-sized enterprises with small revenues, it is not so easy.

   Zhongshan Lotto Electric is a small and medium enterprise exporting home appliances with an annual revenue of about 100 million yuan. The general manager of Lotto Electric, Liming Yang, suffered a lot between the skyrocketing orders and the skyrocketing costs. Among them, the most upsetting thing for him is that the price of bare copper has been rising since the beginning of this year.

   Liming Yang told the media that the price of bare copper was 39,000 yuan/ton at the end of March and early April this year. On October 20, the price of bare copper was 51,700 yuan/ton, up 32.56% from the previous month.

   Liming Yang said that their net profit margin is only 4%, and some products are not yet, and the cost of exchange rate increase alone has swallowed the profit. Another person in the household appliance industry said that in terms of price, export refrigerators "must increase in price, and without price increase, there is really no way to make a profit."

   Although Lotto Electric expects fan orders in 2021 to be 50% higher than in 2020, Liming Yang expects business losses next year due to rising material prices, strong RMB exchange rates, rising labor costs and increased factory rents.

  As a terminal manufacturer, Xinbao has used capacity optimization and automated production to absorb the pressure of rising costs. In the past two years, Xinbao has increased its investment in automation, and at the same time introduced new products to customers every year to ensure stable prices and make money.

   Galanz is also actively promoting intelligent manufacturing. This year, it launched the construction of an industrial 4.0 base at its Shunde headquarters. The mountain refrigerator factory will increase its production capacity by 50% next year, mainly through the improvement of automation and lean production, and the introduction of new products such as breakfast machines.

   In fact, the price of bare copper is rising, and the first one is naturally insulated wire companies, which can be said to be "unspeakable"!

   In response to such a large increase in copper prices, "Magnetic Components and Power" recently interviewed many practitioners engaged in the production of insulated wire and confirmed this fact. Sales employees of a Shenzhen three-layer insulated wire manufacturer told reporters that at the beginning of this year, they had more than 30 thousand one ton of copper wire, and the price of copper has now reached 60 thousand one ton.

  Insulated wire companies are "careless". No one expects that the price of copper is so unconventional, and they can't keep up with the preparation of goods in advance.

   The rapidly rising costs are difficult to digest for any insulated wire company in the short term.

   Even in the face of doubling the price of bare copper wire, no insulated wire company dare to easily increase the current price of insulated wire. This is the status quo of the insulated wire industry. Faced with the current competitive situation of the insulated wire industry, many practitioners interviewed by the reporter can only express helplessness. They urgently await the establishment of a unified standard for the insulated wire industry, with one heart and one mind, and seek common ways for the healthy development of the insulated wire industry. When the industry faces cost pressures, it can keep pace.

   They also hope that there can be a unified group or mechanism to coordinate the insulated wire industry to a more harmonious development path.