The Rise In Steel Prices Will Seriously Affect China'S Rubber Machinery Industry.

China's steel prices climbed again in 2008.

Baosteel recently issued conditional notice that its products rose by an average of 500-800 yuan / ton from the second quarter, and the other steel mills rose roughly the same.

The rise of steel prices will have a huge impact on the rubber machinery industry. The whole industry is likely to lose large areas, and the momentum of rapid growth may be suppressed.

The main cost of rubber machinery is steel, and the cost of vulcanizing machine accounts for about 50% of the total procurement cost, while other rubber machinery is generally around 40%.

In recent years, China's tire industry has formed a "blowout" demand for rubber machinery. Most of the rubber machinery manufacturers in China have already fulfilled their tasks, and products are in short supply. Orders have been signed in the second half of 2007 or the whole year in 2008.

Orders are often a good thing, but the sharp rise in steel prices in 2008 made rubber enterprises' previous orders a heavy burden.

According to statistics, if the cost of steel is increased by 10%, if the rubber machinery industry can not pfer the cost, the gross profit margin will drop by about 5%, and the net profit margin will drop by about 3%.

According to rubber machinery, 5 billion contracts have been signed throughout the year, and the cost of the whole industry is increased by 250 million yuan due to the increase in steel prices.

The profit of quite a few rubber machinery enterprises in China has dropped sharply in January and February, or there has been a certain loss.

It is estimated that in 2008, the price of steel machinery will increase by more than 300 million -4 billion yuan in the rubber machinery industry, which is roughly the same as that of the industry in 2007.

If rubber machinery companies do not take measures, large losses will inevitably occur in the whole industry.