The price increase affects the entire industry.

A sudden price increase affects the entire industry, and the price increase affects the entire industry

Industry insiders pointed out that rising raw material costs are closely related to unstable commodity prices.
The continuous rise in international crude oil has affected the rise in raw materials. “The rise in raw materials has a lot to do with international oil. At present, raw materials have basically increased by 5% to 10%. Affected by this, the prices of our products have also risen.” Wu Xiaomeng, general manager of the fabric department of Jinjiang Wanxinglong Dyeing and Weaving Industrial Co., Ltd. told Reporters, currently we are mainly producing products for the autumn and winter of 2017, among which major materials such as nylon yarn, polyester yarn, chemical fiber fabrics, and knitted fabrics are all affected.

Chemical fibers are directly related to petroleum, so the prices of products such as yarn, nylon, and polyester have been rising recently, but the impact on their companies is currently small. “The price of raw materials has increased by 1,000 to 2,000 yuan per ton. , an increase of 2 cents per yard of cloth, less than 1% of the total cost. Compared with raw materials, enterprises are more affected by environmental protection, overcapacity, labor costs and other factors, ranging between 5% and 10%.” Wu Zhihui pointed out, When the above factors are added together, the burden on enterprises will be very heavy, and everyone will be more sensitive to this round of rising raw material prices.
In addition, some industry insiders pointed out that at 11:30 noon local time on October 17, Germany, a violent explosion occurred at BASF, a chemical company located in Ludwigshafen am Rhein. This major event also triggered an increase in raw material prices. As a large chemical company, the situation of BASF, the source company, will affect downstream companies. According to BASF’s announcement, as the supply of raw materials is still interrupted, the steam cracking unit is still shut down, and about 20 other units are shut down or partially operating. In this regard, industry insiders said that the shutdown of raw material equipment will definitely lead to a rise in raw material prices.

“Cost disaster” is undoubtedly a disaster for the entire fabric industry. The key point of its impact lies in whether it can be transmitted to end consumers. Industry insiders believe that it is unrealistic for end consumers to completely “pay” for this part of the price, because consumers’ demand for work clothes can be elastic, and consumers can choose to buy it or not, buy expensive ones or buy cheap ones. .
When consumer demand is variable but raw material price increases are immutable, the entire industrial chain sandwiched in the middle becomes a sandwich layer. They share adversity and bear this catastrophe together, and in order to protect themselves, they will play games with each other. Under increasing cost pressure, the step of refined management has become a new channel for fabric workwear companies to seek breakthrough and improvement.

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