Hardware fasteners need to abandon low-end

In recent years, prices of raw materials have skyrocketed due to inflation and appreciation of the renminbi. According to Luo Baihui, secretary-general of the International Mould, Hardware and Plastics Industry Suppliers Association, the cost of raw materials for fastener companies accounted for more than 60% of the final product price, and faced severe pressure. When the cost exceeds 70%, it must increase prices. Some fastener companies, especially small and medium-sized enterprises, have no scale effect because they do not have a complicated assembly process. The rise in raw materials poses a great threat to their survival.

Even if this is the case, the fact that the era of high cost of China's fastener industry has come is irreversible. Fasteners and parts and components companies can only accept the reality that prices have been “rising”, and manufacturers are under the circumstance that profits are being squeezed less and less. Only increase the unit price of the product to maintain the most basic production expenses. Some companies disclosed to Jinmo Steel that they had to raise the price of their products in order to survive because of the soaring raw materials, but this has received repeated requests from customers to lower the price of their products. The increase in raw material prices for fasteners has caused rising production costs, which has become a bottleneck in the development of tight enterprises and even threatened survival. However, we cannot rest on our laurels, just as the general manager of Hangzhou Special Standards Co., Ltd. Chen Weibiao said: “The raw materials keep soaring. External factors, we cannot change these economic factors, but we can begin to change from within our company, such as: product quality, internal structure, strengthening technical input, accurately positioning product value levels, improving customer service concepts, etc. These internal factors are all We need to change the focus.” This leads to problems that fastener companies need to think about: The rising cost of raw materials has caused companies to increase product prices, but the premise of rising product prices is the increase in technology and brand strength. This is an ongoing process. This, for small and medium-sized fastener enterprises, is a bottleneck for technological upgrading. They need to survive hard.

Metal fastener companies talk about the most "transition" and "upgrade". However, under the premise of transformation and upgrading, the vast majority of Chinese fastener companies must face such a situation: rising raw material prices, RMB appreciation, labor The cost has risen. In mid-September, the price of raw materials retaliated and rebounded. Lengjing Steel's Shanghai market rose by 50 yuan per ton. Wire products have generally risen sharply. As we all know, the fastener industry is highly dependent on the raw material industry, and raw material prices are rising. The production cost of the firmware has a direct impact and exerts tremendous pressure on the enterprise.

In this era of high-cost production, the advantages of “speed-for-market” and “cost-for-capital” have been weakened. We look back at the course of development of the fastener industry in the past and it is not difficult to find that products will inevitably appear whenever the market is booming. Saturation. China's fastener production accounts for a quarter of global production, but most of them are low-intensity and low-grade products, among which standard items below 8.8 account for about 45%-50%, in an environment where raw material prices are high, The overcapacity of low-grade standard parts has become a stumbling block to the development of the entire fastener industry. Overcapacity, a large amount of inventory pressure leading to tight operating funds, companies want to convert costs into profits have to find new ways, increase investment in technology, with good technology in order to open up broader market resources. In Luo Baihui’s view, we should look to the future. Key national construction projects such as “high-speed rail,” “aerospace,” “highways,” “airports,” etc. are providing opportunities for tight-to-high-end enterprises. Boeing plans to add 3,400 planes to the country in the next 20 countries. The NDRC has invested 800 billion yuan to build rail transit in 6 cities. According to 36 plans to build urban rail transit project cities, by 2020, the new operating mileage of urban rail transit will reach 6560 kilometers, and the demand for rail fasteners will reach 55- 7 billion yuan. These large-scale projects will greatly increase the demand for high-strength fasteners such as high-strength fasteners and titanium alloys. It is not impossible to remove the “low-end” labels!

Always pay attention to grasp the timing of purchase

For fastener manufacturers, all finished products can not be separated from a large number of raw materials such as iron ore and wire rods. Since the beginning of September, the factory price of common carbon steel billets has risen by more than 16%, and the iron ore Platts index rebounded. The rate is also close to 26%. Raw material prices are too high too fast, has made downstream demand difficult to follow, the late sharp correction of ore prices may be difficult to avoid, raw material price fluctuations have a decisive role in the purchase cost of fastening enterprises in China, in the price Actively purchasing raw materials at a relatively low level to prepare for cost reduction in future batch production. Therefore, being able to focus on raw material price fluctuations and buying at low cost is also one of the conditions for the success of a business decision maker.

Control production costs and save resources

Metal fasteners have always been dominated by iron and steel materials. Due to fierce market competition, quality and cost have become the main means of competition among fastener companies. Luo Baihui believes that there are two main ways to reduce costs: 1. To reduce the content of alloying elements or to use other low-cost alloy elements as reinforcement materials; 2. To reduce the manufacturing cost of fasteners, for example, to reduce the heat treatment process in the bolt production process. Non-modulated steel, free-cutting steel used to improve nut machining capability. The introduction of technology in the automotive industry in China has played a role in promoting the application of new materials for cold heading steel. Some of the major high-strength fasteners use foreign material standards. Luo Baihui believes that to achieve the goal of saving resources, accelerating the use of special steel for special bolts. R&D will be valued in the next 3-5 years. This is also the trend of tight enterprises in the situation of soaring raw material prices.

In the entire manufacturing industry chain, the fluctuation of raw material prices has nothing to do with non-influence of the downstream fastener industry, but it is not a solution. The future development of fasteners should fundamentally solve the problem, how to solve the transition of low-end products Capacity? How to grasp the procurement timing of raw materials to achieve low-cost production capacity? How to reduce production costs and save resources? These are questions that companies should face. Raw materials are "rising". Passive enterprises will be shuffled. To survive and develop, we must take the initiative to open up new paths and improve our internal strength to cope with market changes!