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Soaring copper cable industry following the situation of hardship

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Soaring copper cable industry following the situation of hardship

release date:2014-08-07 00:00 Source: Views:

Wire and cable industry is a very heavy dependence on raw material industries, especially the dependence on copper has never changed over the years. But we all know, the high price of copper and plus special orders contractual issues the cable industry, resulting in either prices or the price of copper for wire and cable manufacturers are unfavorable. Thus, in recent years, the discussion about having a lot of raw materials, the discussion on developing aluminum cable and strictly control the production costs will be more, thus the study of wire and cable cost management is necessary.

Obviously, whether copper or aluminum, both constitute the main raw material of the wire and cable industry, in 2011 the wire and cable manufacturing industry output value has exceeded one trillion, ranking first in the world, while five years ago in 2006 , China's wire and cable manufacturing industry output value is less than four hundred billion, output growth fast. It is also because China's wire and cable industry has developed rapidly, the demand for copper, aluminum and other nonferrous metals is growing. And in recent years, electric power, telecommunications, railways, urban rail transportation, shipbuilding, automobiless, petrochemicals, construction, roads, household appliances and other industries still maintain a large investment scale, construction accelerated, more spawned demand for wire and cable.

According to relevant statistics show that 60-70% of wire and cable copper copper consumption volume nationwide, with the amount of various types of copper wire and cable products, is roughly: Power cable about 20 to 30%, electrical equipment, wire cable about They accounted for 28-30%, accounting for 26-29% of winding wires, communication cable accounts for 5- to 7%, and other cable accounts for about 4-5%. With years of development, China's domestic wire and cable manufacturers bear the heavy cost pressures, as copper, aluminum, plastics and other raw materials in the cost structure of wire and cable accounted for more than 80%, plus the energy prices, transport costs and rising cost of human resources, is to let these companies worse.

In recent years, the world's copper ingot market prices soaring, the domestic wire and cable costs soaring, almost all cable companies are facing severe cost crisis. Some cable companies want to be able to change the power management unit tender, the price increase has signed a contract with the cable companies can weather the storm. However, more companies began to compete without rules, and because of wire and cable companies, small and scattered, aggravated disorderly competition wire and cable industry, lower prices phenomenon. Faced with raw material prices, rising cost of wire and cable manufacturing enterprises showed most is "helpless."

Because the order they are with electricity, communications, transportation, or the steel industry signed delivery cycle is generally more than one year, while shipments to wait until that day, the price of the contract but often even costs are being paid. Once the contract is signed, the price can not be changed, and therefore, there is raw material cost pressures brought about by rising prices can only be borne by the enterprises themselves.

Copper, aluminum and other major raw materials prices, semi-rigid cable is now seriously affecting the survival of the wire and cable industry, foreign cable companies have established measures to deal with raw material prices. Foreign cable companies have established a good risk control system, by signing long-term supply treaty with suppliers, hedging, long-term trade contracts and other ways to avoid the risk of price fluctuations in copper and aluminum; take centralized purchasing department way to enhance the company and its suppliers negotiating position, strengthen and improve risk control system and mechanisms of raw materials; some companies, such as Nexans, SuperiorTelecom company plans to extend the industrial chain, especially in the area of supply of the copper material, the risk of weakening the copper price volatility; multinational companies to establish control the risk of fluctuations in interest and exchange rates mechanism. Multinational companies in terms of assets and liabilities rate is far lower than domestic companies, generally remain at about 30 percent, the company's assets is relatively higher security.

Due to a sharp rise in the cost of the wire and cable, but its sale price it is difficult to reasonably improved. Therefore, the market competition is becoming increasingly fierce, especially in the relatively low added value and low-end wire and cable products in the market, lower prices Price Competition situation is quite common. The industry believes that price competition resulting product is the root cause of blind investment and overcapacity, oversupply. On the one hand, since the investment threshold is low, resulting in the influx of a large number of enterprises, resulting in enterprises within the industry? "Excessive and indiscriminate." The size of the wire and cable industry companies up to more than 8000. The industry's production capacity exceeds demand, there has been a serious surplus. On the other hand, due to the "threshold" is low, is not only a low concentration of the industry more and more, and so does not have the necessary means part of the production capacity, quality control and testing "workshop enterprise" has been removed from the industry, and has become fake, shoddy, shoddy, shoddy sources produce cable products, and by virtue of depressed sales prices and other means to disturb the market competition order, aggravated disorderly competition within the industry.

Quite the cable companies believe that high copper prices, sharply rising costs, some small businesses can not afford, and even some have been discontinued. But the market is still there, on the order of millions of cable actually occupy a certain proportion. However, users are not willing to accept the purchaser due to the increase in copper cable cost increases leaving the facts. Cable companies are very perplexed, and some companies had signed a contract with the users, the price is not adjusted cable can, but if we have cable requirements, must also me to do. "Tsutsumiuchi loss Diwai fill," next order then to recover damages. This is the cable industry unique "King terms", it reflects the cable industry under tough in copper prices soaring.

Obviously, whether unilateral rising raw material, or the cable industry unique "King terms", are forcing down the wire and cable industry to seek new development path, whether it is developing more stable performance, lower-cost aluminum cable, or efforts to modify unreasonable "King terms", or to reduce costs through strict cost management and wire and cable production technology and more advanced technology, are necessary. Especially in recent years the wire and cable industry profit margins continue to decrease, the low-end market competition tends to incandescence, more requirements for wire and cable manufacturers from a cost perspective, Tangchu road.

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