RMB rising, Raw Material Prices Soar and Commodity Prices Continue to Rise
The exaggerated rise in raw materials so far this year could be moderated after March, but copper prices have now continued to rise to close to 70,000 yuan a tonne. Raw material prices continue to rise, resulting in higher production costs for foreign trade processing enterprises, forced to raise the price of export products.
Under the background of nearly 40% year-on-year increase in foreign trade exports in the first quarter, factories dare not accept orders due to the rare surge of raw materials and other pressures in recent years. Such “semi-stagnation” has been forced to become the “new normal” for foreign trade manufacturers.
Since the beginning of this year, the prices of major products in steel, copper, petrochemical and other industries have continued the upward trend started last year, and after making a historic “good start”, they have not fallen back as fast as in previous years, but have continued to rise.
In less than a year, the price of steel, an important raw material for industrial goods, has risen by 50%,
As a maker of stainless steel products in China, its main raw materials are steel and nickel, and rising raw material prices have pushed the company’s raw material costs up nearly 50% so far this year.
The Mandarin Commodity Index stood at 182.49 on April 16, up 8.1% from January 29, with the industrial goods index up 10.2%. Black varieties rose especially obvious, the first quarter of the average settlement price of steel rebar futures reached 4532 yuan/ton, 24.7% higher than the annual average price in 2020, at the highest level since the listing of steel rebar futures in 2009. The average iron ore futures settlement price in Shanghai reached 1,062 yuan/ton, up 39.7% compared with the annual average price in 2020.
The rising prices of raw materials have led to panic hoarding by buyers, which has further led to shortages and pushed up prices. Shortages of raw materials have also led to delays in factory deliveries.
With the further appreciation of RMB against the US dollar, the price of foreign trade export products is bound to rise accordingly. Customers who need to purchase steel and other bulk commodities suggest purchasing as soon as possible in order to reduce the purchase cost.