The impact of rising raw material price on the valve industry
In recent years, China valve industry has developed rapidly, and its product export and market share have been expanding. It has gradually become an important production base and main product sales market for the global valve industry. With numerous valve enterprises, small-scale, lack of core competitiveness, and low concentration of enterprises, it is difficult for China valve industry to exert influence in the international market, which has greatly restricted the healthy development of the valve industry. China valve industry is a labor-intensive industry, with a focus on expansion. In order to have long-term development, China's valve industry must adjust and optimize its industrial structure. It must continue to give full play to the advantages of the traditional valve industry, and vigorously develop knowledge, technology-intensive industries and emerging industries to promote the upgrading of the valve industry.
In recent years, under the influence of factors such as rising raw materials and labor costs, valve companies have to find ways to change their strategies and adapt to the market situation for their own survival and development. Only in this way can the valve industry gain opportunities for improvement.
First of all, China's economic development has a relatively large impact on raw materials. China's industrialization and urbanization have been accelerated and implemented, which has a distinct promoting effect on the valve raw material industry.
Secondly, China high energy-consuming industries have released too much capacity and increased pressure on energy conservation and emission reduction, which lead to the implementation of measures such as eliminating backward production capacity, saving energy and reducing emissions. A number of high energy-consuming enterprises were eliminated. In August, the country shut down a large number of metal mining enterprises, causing the price of metal materials to rise sharply. After the price of casting products was lowered, the prices of various steel (waste) markets continued to rise, which was weak before. Hence, the market price of steel scrap has skyrocketed, and the silicon, ferromanganese and auxiliary materials of non-ferrous metals have been rising at the same time. In recent years, due to the implementation of the new environmental protection law, Governments at all levels and environmental protection departments have strict requirements on foundry companies. Casting or forging companies invest huge sums of money to purchase equipment. Nowadays, electric energy and gas are used, instead of the traditional low-cost heating method of coal, in that the dust and wastewater emission must meet the national standards, which inevitably increases the production cost of the enterprise.
In terms of taxation, the tax administration and electrical sectors are interconnected and adopt advanced scientific taxation methods. The energy consumption of enterprises is linked to production capacity, which regulates corporate taxation.
Since May this year, the country has rectified the heavily polluting industries, and the foundry industry is also among them. The foundry industry is facing the most stringent rectification and improvement stage in history. The rectification and improvement requires a large amount of capital investment, and the production and management costs will increase. Therefore, it also has a relatively large impact on the rise of raw material price. As the price of raw materials rises, the valve industry had to make price adjustments, enough though the original profit margin was not high, which seems to be very reasonable.
Innovation is the key
In the new market situation, valve companies must adhere to the concept of innovation, that is, innovation in product development and technological transformation. Valve companies can actively cooperate with research institutes and universities to jointly develop new product projects, and strive to open up domestic and foreign markets, thereby overcoming quantity-based growth, upgrading product grades, increasing the added value of products, focusing on independent brand building, to enhance the position of China's valve products in the global valve industry. In addition, valve companies should improve the ability to resist risks and its own "bargaining" ability, and thus enhance the competitiveness of sustainable development in valve industry.
The competition in the valve market is becoming increasingly fierce. Excessive market competition makes it difficult for companies to achieve healthy and orderly development. Innovation is not only to seek high value-added products, to get rid of the curse of meager profit in the valve industry, but also to maintain their own survival and development. The enterprises must carry out a series of innovations, develop high-tech products that have a significant role in meeting the needs of the market, provide strong support for industrial development, and change "manufacturing" to "creation". Sticking to stereotypes, in the end, it can only fall into the vicious competition of price competition.
Cost problem of goods manufactured comes firs when seeking for the survival of valve companies in the industries, because the depressed whole market and rising enterprise costs will directly lead to a decline in corporate profits. In this case, the valve industry cannot care much about the cost of competition, although cost and expense reducing is advocated a few years ago. At this stage, if a valve enterprise wants to be invincible in the high-cost competition, it must continuously innovate and upgrade the design, be more meticulous in product production, and assign human resources reasonably. In short, hardware upgrades of an enterprise enhance the core competitiveness.
Behind the "China Speed", the development of the valve industry has also exposed many problems and faced severe challenges. It can be said that opportunities and challenges coexist. Therefore, the valve industry should actively promote industrial innovation transformation and upgrading, and achieve quality and efficiency breakthrough.
In recent years, under the influence of factors such as rising raw materials and labor costs, valve companies have to find ways to change their strategies and adapt to the market situation for their own survival and development. Only in this way can the valve industry gain opportunities for improvement.
First of all, China's economic development has a relatively large impact on raw materials. China's industrialization and urbanization have been accelerated and implemented, which has a distinct promoting effect on the valve raw material industry.
Secondly, China high energy-consuming industries have released too much capacity and increased pressure on energy conservation and emission reduction, which lead to the implementation of measures such as eliminating backward production capacity, saving energy and reducing emissions. A number of high energy-consuming enterprises were eliminated. In August, the country shut down a large number of metal mining enterprises, causing the price of metal materials to rise sharply. After the price of casting products was lowered, the prices of various steel (waste) markets continued to rise, which was weak before. Hence, the market price of steel scrap has skyrocketed, and the silicon, ferromanganese and auxiliary materials of non-ferrous metals have been rising at the same time. In recent years, due to the implementation of the new environmental protection law, Governments at all levels and environmental protection departments have strict requirements on foundry companies. Casting or forging companies invest huge sums of money to purchase equipment. Nowadays, electric energy and gas are used, instead of the traditional low-cost heating method of coal, in that the dust and wastewater emission must meet the national standards, which inevitably increases the production cost of the enterprise.
In terms of taxation, the tax administration and electrical sectors are interconnected and adopt advanced scientific taxation methods. The energy consumption of enterprises is linked to production capacity, which regulates corporate taxation.
Since May this year, the country has rectified the heavily polluting industries, and the foundry industry is also among them. The foundry industry is facing the most stringent rectification and improvement stage in history. The rectification and improvement requires a large amount of capital investment, and the production and management costs will increase. Therefore, it also has a relatively large impact on the rise of raw material price. As the price of raw materials rises, the valve industry had to make price adjustments, enough though the original profit margin was not high, which seems to be very reasonable.
Innovation is the key
In the new market situation, valve companies must adhere to the concept of innovation, that is, innovation in product development and technological transformation. Valve companies can actively cooperate with research institutes and universities to jointly develop new product projects, and strive to open up domestic and foreign markets, thereby overcoming quantity-based growth, upgrading product grades, increasing the added value of products, focusing on independent brand building, to enhance the position of China's valve products in the global valve industry. In addition, valve companies should improve the ability to resist risks and its own "bargaining" ability, and thus enhance the competitiveness of sustainable development in valve industry.
The competition in the valve market is becoming increasingly fierce. Excessive market competition makes it difficult for companies to achieve healthy and orderly development. Innovation is not only to seek high value-added products, to get rid of the curse of meager profit in the valve industry, but also to maintain their own survival and development. The enterprises must carry out a series of innovations, develop high-tech products that have a significant role in meeting the needs of the market, provide strong support for industrial development, and change "manufacturing" to "creation". Sticking to stereotypes, in the end, it can only fall into the vicious competition of price competition.
Cost problem of goods manufactured comes firs when seeking for the survival of valve companies in the industries, because the depressed whole market and rising enterprise costs will directly lead to a decline in corporate profits. In this case, the valve industry cannot care much about the cost of competition, although cost and expense reducing is advocated a few years ago. At this stage, if a valve enterprise wants to be invincible in the high-cost competition, it must continuously innovate and upgrade the design, be more meticulous in product production, and assign human resources reasonably. In short, hardware upgrades of an enterprise enhance the core competitiveness.
Behind the "China Speed", the development of the valve industry has also exposed many problems and faced severe challenges. It can be said that opportunities and challenges coexist. Therefore, the valve industry should actively promote industrial innovation transformation and upgrading, and achieve quality and efficiency breakthrough.
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BALTIC VALVE CO., LTD supplies superior quality industrial valves covering ball valves, globe valves, gate valves, check valves, plug valves, butterfly valves, marine valves, forging steel valve, filter, etc.
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