China supply chain under huge pressure of raw material costs

China supply chain under huge pressure of raw material costs

China's factories, power plants and farms are under enormous pressure from the rising cost of raw materials, while the Chinese people's pockets have not been affected too much.

Electronic equipment makers are battling raw material price fluctuations and cutting copper wire orders, said Henan Qixing Copper. This is a double punch for suppliers of metal components, which are struggling to cope with the rise in refined copper prices.

“This is a huge capital challenge for the company,” said Hai Jianxun, sales manager at Henan Qixing Copper, a copper wire fabrication company. “This situation requires a larger amount of capital to keep the company running smoothly.”

The Chinese government has stepped up efforts to contain commodity prices to help these industries weather a period of soaring inflation that it sees as temporary. Verbal interventions by politicians, decision-makers and exchanges seem to have had some success in driving down commodity prices. However, for many companies in the supply chain, the pressure on capital is increasing.

China's industrial production index eased slightly in May 2021, suggesting growth may have peaked at this point. The input material price index rose to its highest level since 2010, putting pressure on small businesses.

During Premier Li Keqiang's recent visit to Ningbo on May 24, a home electronics company complained that rising raw material prices were putting enormous pressure on manufacturing operations. export. A copper valve manufacturer also lobbied for support from the Government.


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