Following is the information gathered by our company recently that may help you to understand the cause of price rise and dramatically delay of production.
1. China electricity shortage
The China ministry of Ecology and Environment has issued the draft of “2021-2022 Autumn and Winter Action plain for Air Pollution Management” in september, so start from september our manufacturing operation has been adjusted to “run for 3 days and stop 4 days every week”, and the production capacity is less than half of that under normal conditions. Following is the chain reactions that may give us a better view:
Government announced carbon neutrality target > Reduce coal consumption > Power plant reduce output (Over 60% chinese power plant burn coal) > Power shortage > Factory machine standby > Cost rise (Wastage of labour and machine capacity) > Delivery delay > Material shortage on market > Manufacturer compete raw material > Raw material cost rise
Result: The shortage and cost rise is happening all over china for all the manufacturers. And this situation will be normal for quite a while. What we can do is do our best to demonstrate our skill fully in this competition. We hope all our customers understand this trend and stand with us. Unstable market is also a big chance for all the players in this game, with mutual trust and swift actions, we will pass this difficult period together.
2. USA Quantitative Easing
US’ excessive money-printing > Purchase goods from all over the world > Over supplied USD on the market (Export of inflation)> Global products and material cost rise (Oil and chemicals) > China import raw material cost rise (PVC resin cost ) > Export product cost rise
3. Worldwide power shorage
France, Spain and Poland are among the EU-member-states urging Brussels to intervene in energy markets as wholesale gas prices soar to record levels, hitting businesses and families. The European Union seeks to keep plans to tackle climate change on track amid record-high energy costs. But it’s clear that poorer households have to be supported in some way. European countries aren’t alone in their struggle with energy-supply. India is facing a crunch in coal, following a surge in demand. Energy suppliers there have recently added over 28 million consumers, mostly lower-middle class and poor, who are buying goods like fans, lights and TV sets. It’s not just soaring demand: Recent monsoon rains flooded mines and disrupted transport. That sent coal prices up sharply for power stations. Coal generates nearly 70 percent of India`s electricity. Three-quarters of the fuel is mined domestically. State-run giant Coal India produces most of the country’s supply … and says it’s now a ‘war-footing’ to ensure deliveries. But supplies for more than half of coal fired plants are at a critical level. Delhi says it’s even considering rebooting IDLED power stations.
What we did?
We have warned all our sales agent in the begining of September about what is happening now, i think you already received the notice to speed up the process of running order from our sales agent one month ago. For all the order processing, we already locked the price, so its safty is on, only conern is delivery, this part we hope our customer can understand the big enviroment and give us more time than than usual.
Suggestions for customer:
Speed up working process.
Place order immediately.
Talk to our sales about the purchasing plan of 2022.