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    Home > Chemial News > Echemi Focus > Another collective price increase of raw materials by 20%!

    Another collective price increase of raw materials by 20%!

    Echemi 2021-04-26

    I thought that the exaggerated increase in raw materials could be reduced after March, but the May price increase letter is already on the way.
    The upstream raw materials are either increased in price or out of stock. Even if the deposit is placed, they are basically out of stock. It is reported that some raw materials are scheduled for 2023...

     

    It will rise in May! The four major silicone giants collectively raise prices by 20%!

    According to industry sources, Dow Silicones, headquartered in the United States, will increase its quotations for silicone products from May, and its distribution agents have begun to notify downstream companies of price adjustments since early April.

    Japan's Shin-Etsu Chemical, the world's largest supplier of silicon materials, also announced in March that it would raise the price of silicone products by 10-20%.
    So far, the world's four major silicone manufacturers-Momentive and Dow in the United States, Wacker in Germany and Shin-Etsu in Japan have all increased their prices by 5%-20%.


    In the main application areas of organic silicon, display panels have increased by 159%, 100% and 109% for 32-inch, 43-inch, and 55-inch display panels in the past 11 months, and the prices have been rising for 12 consecutive months.


    The strong demand for semiconductors, PCBs, and photovoltaics has been going on for half a year, and auto parts have been out of stock many times, and even head manufacturing companies such as Hon Hai and Volkswagen cannot satisfy them. With the continuous recovery and vigorous development of major downstream industries, the demand for silicone materials may continue to rise.


    After paying the deposit, you have to line up to get the goods, and the schedule will even be scheduled until 2023!

     

    "Now all raw materials are required to be paid in cash, the original billing period is gone, and even if the deposit is paid, the goods cannot be obtained." Zeng Xiansheng said that in the past when raw materials were purchased, upstream companies would still give about 60 days of billing. Now it’s the other way around. I have to wait in line for the goods. There is a transmission that is even scheduled to 2023, which is simply too exaggerated.

     

    For downstream manufacturers, if the upstream raw materials are not in place, their delivery cycle can only be passively extended, and some delivery cycles are even 70 days longer than the original. In order to ensure a little profit, we can only bite the bullet and negotiate price increases with customers, as well as communicate with customers about the extension of the delivery period. The consequences of the negotiation will inevitably be accompanied by the risk of loss of orders and decline in sales.


    The direct consequence of being squeezed by both ends is that the pressure on the corporate capital chain has increased significantly. CCTV's previous survey of the manufacturing industry in Guangdong showed that some small household appliances companies that were unable to mold and process electrical accessories on their own went bankrupt when they were unable to withstand the price increase of general accessories factories and were unable to receive orders in the short term.
    Under the vicious circle, "semi-stagnation" was forced to become the "new normal" for downstream manufacturing companies. The wave of corporate failures may continue.

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