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RETURNThe impact of raw material price fluctuations on the industrial adhesive products industry geometry?
Release time:
2024-09-04
Summary： Direct cost rise: raw materials are the basis for the production of industrial adhesive products, and their price fluctuations will directly affect the production cost of products.
The impact of raw material price fluctuations on the industrial adhesive products industry is mainly reflected in the following aspects:
In terms of cost:
Direct cost rise: raw materials are the basis for the production of industrial adhesive products, and their price fluctuations will directly affect the production cost of products. When the price of raw materials rises, the cost of purchasing raw materials increases. If the enterprise cannot completely pass on the increased cost to downstream customers, the profit margin of the enterprise will be compressed. For example, the production of adhesives commonly used resin, rubber, organic solvents and other raw materials prices, will make the cost of adhesive production enterprises increased significantly.
Changes in inventory costs: The instability of raw material prices can make companies face challenges in inventory management. If the company expects that the price of raw materials will rise, it may increase the inventory of raw materials to reduce future procurement costs, but this will take up a lot of funds and increase inventory costs and capital costs; on the contrary, if the company expects that the price of raw materials will fall, it may reduce Inventory, but if the price does not fall as expected, the company may face the risk of insufficient supply of raw materials, affecting the continuity of production.
Production and operation:
Difficulty in adjusting production plans: Fluctuations in raw material prices can disrupt a company's production plans. When making production plans, companies need to consider the supply and price of raw materials. If the price of raw materials fluctuates frequently, it is difficult for enterprises to accurately predict the price trend of raw materials, which will lead to increased uncertainty in production planning and affect the normal production. For example, a company originally planned to produce a certain number of adhesive products in a certain period of time, but due to a sudden increase in raw material prices, the company may need to reevaluate the production plan or even suspend production.
Product quality fluctuations: The quality and performance of raw materials have an important impact on the quality of industrial adhesive products. If raw material price fluctuations lead to unstable quality of raw materials purchased by enterprises, it will affect the quality of products. For example, some inferior raw materials may cause the adhesive bond strength, water resistance, aging resistance and other performance decline, affecting the market competitiveness of the product.
In terms of market competition:
Accelerated industry reshuffle: For some smaller companies with weaker financial strength, fluctuations in raw material prices may make it difficult for them to bear cost pressures, and thus face the risk of bankruptcy or merger. On the other hand, enterprises with large scale and strong financial strength may reduce costs by means of scale effect and optimizing procurement channels, so as to occupy an advantage in market competition. This will accelerate the reshuffle of the industry and increase the concentration of the industry.
Intensified price competition: In the case of rising raw material prices, companies may adopt price reduction strategies in order to compete for market share, which will lead to increased price competition in the industry. While reducing prices, enterprises also need to ensure the quality and profit of products, which puts forward higher requirements for the management ability of enterprises.
Product development and innovation:
Restricted investment in research and development: Fluctuations in raw material prices can affect a company's profitability, which may limit its investment in product research and development and innovation. In the case of financial constraints, enterprises may reduce investment in new product research and development, affecting the technological progress and product upgrading of enterprises, which is not conducive to the long-term development of enterprises.
Promote environmentally friendly product research and development: raw material price fluctuations will also prompt companies to accelerate the development and application of environmentally friendly raw materials. With the improvement of environmental awareness, the market demand for environmentally friendly adhesive products is increasing. In the case of raw material price fluctuations, companies may be more active in looking for alternative raw materials and developing environmentally friendly products to reduce costs and meet market demand.
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