Upstream raw material prices fluctuate, lighting companies have increased prices
Recently, the well-known lighting company Sanxiong Aurora issued a price increase notice saying that the company will increase the prices of household products and commercial lighting products by 3%-8%, and the price increase time is April 1.
Sanxiong Aurora said in the price increase letter, "The company has been resisting the pressure of rising raw material prices through internal optimization measures, risk control and sacrificing manufacturers' profits, but since the beginning of 2022, the prices of various raw materials have continued to rise. The increase has exceeded the company's internal controllable range."
In fact, it is not new in the industry to raise prices according to the company. Since the beginning of this year, many head lighting companies have officially announced product price increases.
According to observations, since the beginning of the year, LEEDARSON has released the first price increase notice for the Year of the Tiger in the LED industry. The notice stated that from February 10, 2022, the prices of LEEDARSON's entire line of products will be raised (except for some products).
At the same time, Sidon Lighting and Qiyi Group have also raised their product prices. Qiyi Group announced that it will make appropriate adjustments to the prices of its products from January 1, 2022.
Seton Lighting stated in the price increase notice that the price of commercial license products will be adjusted from January 1, 2022, and the overall product increase will be 3%-5%. Among them, it is clear that commercial license products, home improvement products and industrial public construction products all increased by about 3%-5%.
A closer look at the reasons behind the price increase is mainly related to the price increase of upstream raw materials.
It has been observed that the raw materials such as copper, aluminum, lithium, and nickel related to the production of raw materials by the company have fluctuated greatly recently. Taking copper as an example, since the copper price hit a new high in May 2021, in early March this year, the copper price once again approached the previous high. Although it has since retreated deeply, on the whole, the copper price in March showed a volatile upward trend.
At the same time, aluminum prices are also rising. According to Wind data, as of March 28, the aluminum price this week has changed by 7% month-on-month, and the price is still rising.
However, in addition to the increase in the price of raw materials on the production side, the frequent occurrence of domestic epidemics has also increased the operating costs and transportation costs of enterprises.
It is understood that since March, many places in China have faced a severe epidemic situation, and many lighting manufacturers and lighting stores have completely stopped production and production in line with the requirements of epidemic prevention.
For example, Shenzhen, Guangdong has implemented closed management from March 14 to 20, and Changzhou, Jiangsu has implemented closed management in some areas since March 18.
In addition, due to the impact of the domestic epidemic and the continuous increase of prevention and control measures, it has also affected the procurement of raw materials and product transportation in some areas such as Guangdong, Jiangsu, Shanghai, Shandong, Hebei and other provinces, and even led to delays in order delivery.
In particular, industry insiders believe that under the stimulus of geopolitics, the rising international oil prices will further affect the transportation costs of enterprises.
Feng Jianzhong, president of the Zhongshan Modern Logistics Association, said in an interview recently that all lighting companies need not panic while taking precautions against price increases. Most of the logistics companies operate in a state of "guaranteeing capital and having a slight surplus". , because only by preserving the strength at this stage can we meet the possibility of a rebound.
The price of raw materials has risen and profits have been compressed. According to the company, it is still facing a lot of tests this year.