Commodity Prices Skyrocketed &Nbsp, And Downstream Industries Suffered A Cost Crisis.

"The mountain rain is coming, the ambush is everywhere." At the end of the phone, " Shoe boss "Wen Baoshan (a pseudonym) describes the current situation of enterprises. On his three day in Shanghai, he traveled to several shoe cities to contact wholesalers for market research. "The cost of rubber has gone up, and foreign orders are afraid to meet. The price of domestic terminals is not enough because of too much competition." His voice showed helplessness.

Wen Baoshan's shoe factory is located in Jinjiang, Fujian, which is known as the "brand capital" of the footwear industry. According to his introduction, the raw material of shoe material is at a high price. After a few days, the factory price of rubber has risen by nearly 10%.

The initiator is the oil price that is spanmitted to the downstream enterprises through the chemical product manufacturing link. And that's just the tip of the iceberg. Under the background of the depreciation of the US dollar and the spread of hot money, the price surge has almost become the "chorus" of the bulk commodity market. In October 14th, cotton prices continued to go crazy, and strong trading reached a record high. Rubber rose 4.26%, refresh the record. Shanghai Gold late pulled up, also occupy the commanding heights of history.

Bulk commodity Surging upward

The reporter understands, since the three quarter, "coal flying color dance" not only summarizes the trend of the two tier market resource share plate, but also the image of mass commodity continues collectively hot. The price of rubber, which is beset by many downstream manufacturers, is on the rise. "The main contract of natural rubber futures broke through 3000 yuan / ton mark ago, becoming the fifth futures market after the gold, strong wheat, hard wheat, corn and cotton futures." Tao Jinfeng, Donghua futures research and development department, said.

The rise in rubber prices is closely related to the high oil prices of raw materials. And crude oil prices, which affect many industries such as chemical industry, machinery, spanportation, clothing, building materials and so on, are rising strongly. According to the reporter's observation, since the end of September, the international oil price has increased by more than 10 US dollars. During the long holidays, the crude oil of the New York stock exchange hit a new high for the past year, breaking through the $84 mark.

"The price of domestic steam coal has also shown an upward trend for three consecutive weeks, and will enter an upward stage early, and the domestic coal price increase will reach 10% in the fourth quarter." For coal, investment advisor Ren Hao Ning, a consultant of CIC, is forecasting. The downstream industries of coal are power, steel, building materials and chemical industry.

The four quarter strategy report of Xiangcai securities shows that the overall spot price of commodities has exceeded the peak of 2008. Among them, the price of copper, which is widely used as the basic raw material, has risen by 2000 yuan in the three trading days after the end of the National Day holiday. The price of tin in the London metal market has been refreshed.

And related to Downstream processing enterprises The survival of the lifeline of agricultural products, international soybean, corn and other consecutive months of rising, has climbed to the height of the financial crisis. Domestic oil and fat raw materials also deduct a sharp rise, soybean oil, vegetable oil all rose 2000 yuan / ton or more.

The cotton market in the upper reaches of the textile industry is also popular. The cotton futures contract of Zheng Shang has nearly doubled compared with the same period last year. It is reported that in late July, domestic cotton prices were still around 16600 yuan / ton, and by October 11th, they had risen to 24500 yuan / ton, rising 47.6% in two and a half months, and domestic cotton prices saw a new high of 15 years.

"Weak dollar" brings the butterfly effect.

The commodity market is surging, which is likely to be a "protracted war" for "made in China". The mainstream view of the industry is that the behind the wheel of this round of inflation is not entirely a supply problem, but an international fund speculation and domestic hot money follow suit. Tao Dong, chief economist of Credit Suisse, called it "the exchange rate war caused by the excessive quantitative easing policy of the United States". In September 29th, the US House of Representatives passed the "exchange rate reform to promote a fair trade act" aimed at imposing special tariffs on countries that underestimate the exchange rate of the currency, igniting the global money market. Local time 12, the Federal Reserve announced the September monetary policy meeting. The minutes show that the Federal Reserve is ready to launch a new round of quantitative easing measures.

The Fed's attitude has triggered a global chain reaction. The Bank of Japan announced its interest rate cut from 0.1% to 0-0.1%. South Korea, Brazil and other countries have also said they will not sit idly by the exchange rate fluctuations. And the Bank of Australia, which is expected to raise interest rates by 25 basis points, has also stopped the pace of raising interest rates unexpectedly.

"The sharp fall in US dollar led to a surge in the price of US dollar goods." Wu Ling, manager of futures research center of new century, believes that at present, all countries are taking the US as the leader, and continue to implement the policy of easing up, so as to stimulate a large number of funds to enter the commodity market. Huang Haifang, an analyst at Soochow securities, also believes that the competitive devaluation of various countries has made obvious support for resource commodities.

As for how long this battle will last, Zhejiang merchants futures analyst Tang Fenglei said that the fourth quarter PTA futures will still have great room for promotion. "Due to the intensification of the exchange rate problem, there is still an expanding trend in the amount of money invested in various countries. The strengthening of the renminbi appreciation will stimulate the hot money to flow into the country, and the real estate regulation will start again, and the commodity market will be one of the main channels for hot money" flood discharge ". Tao Jinfeng also said that the "currency war" and the depreciation of the US dollar will continue. The bull market of commodities is far from over, at least for the second half of next year.

Downstream businesses complain incessantly

"The rise in commodity prices is good for the upstream industry chain. Taking oil, mining profits are thickened. Ultimately, it is a good monopoly industry. The middle and lower reaches of the day are not easy to rise because of the rising procurement costs." Wen Baoshan told reporters that some flexible small shoe manufacturers in Jinjiang and Putian have even shut down the production line. "Our upstream suppliers of rubber products are also" sandwich biscuits ", and their economic benefits are also affected by the increase in oil prices.

Reporters learned that in addition to the rubber manufacturing industry, looking at the oil "face" industry also includes the same three synthetic materials as raw materials for plastics, chemical fiber industry, the largest fuel consumption of non-metallic mineral products industry and electrical machinery and equipment industry, as well as electronics, petrochemical, textile and clothing, food, building materials, forestry, medicine and automobile industries.

In addition, the cost of logistics spanportation in most manufacturing industries is also affected by the increase in oil prices. "The rise in oil prices has also increased the cost of automotive chemicals, such as plastics, plastic additives, seat foam mats, polyurethane dashboards, polylactic acid resin automotive interior materials, seals and lubricants." Li Yongjun, a senior commentator in the automotive industry, said: "this will be directly spanmitted to the procurement system of the first class auto parts suppliers."

In the world's largest home textile production base, Tongzhou District, Nantong, Jiangsu, a cost crisis triggered by the rise in cotton prices is also becoming a spark. Reporters from the Nantong municipal government open information to see, a survey shows that all sectors of production enterprises have assumed the cost pressure brought by the rise in cotton prices, the company's production profits have declined. "The mountain rain is coming, the ambush is everywhere." At the end of the phone, "shoe boss" Wen Baoshan (a pseudonym) describes the present situation of enterprises. On his three day in Shanghai, he traveled to several shoe cities to contact wholesalers for market research. "The cost of rubber has gone up, and foreign orders are afraid to meet. The price of domestic terminals is not enough because of too much competition." His voice showed helplessness.

Wen Baoshan's shoe factory is located in Jinjiang, Fujian, which is known as the "brand capital" of the footwear industry. According to his introduction, the raw material of shoe material is at a high price. After a few days, the factory price of rubber has risen by nearly 10%.

The initiator is the oil price that is spanmitted to the downstream enterprises through the chemical product manufacturing link. And that's just the tip of the iceberg. Under the background of the depreciation of the US dollar and the spread of hot money, the price surge has almost become the "chorus" of the bulk commodity market. In October 14th, cotton prices continued to go crazy, and strong trading reached a record high. Rubber rose 4.26%, refresh the record. Shanghai Gold late pulled up, also occupy the commanding heights of history.

Commodities are surging.

The reporter understands, since the three quarter, "coal flying color dance" not only summarizes the trend of the two tier market resource share plate, but also the image of mass commodity continues collectively hot. The price of rubber, which is beset by many downstream manufacturers, is on the rise. "The main contract of natural rubber futures broke through 3000 yuan / ton mark ago, becoming the fifth futures market after the gold, strong wheat, hard wheat, corn and cotton futures." Tao Jinfeng, Donghua futures research and development department, said.

The rise in rubber prices is closely related to the high oil prices of raw materials. And crude oil prices, which affect many industries such as chemical industry, machinery, spanportation, clothing, building materials and so on, are rising strongly. According to the reporter's observation, since the end of September, the international oil price has increased by more than 10 US dollars. During the long holidays, the crude oil of the New York stock exchange hit a new high for the past year, breaking through the $84 mark.

"The price of domestic steam coal has also shown an upward trend for three consecutive weeks, and will enter an upward stage early, and the domestic coal price increase will reach 10% in the fourth quarter." For coal, investment advisor Ren Hao Ning, a consultant of CIC, is forecasting. The downstream industries of coal are power, steel, building materials and chemical industry.

The four quarter strategy report of Xiangcai securities shows that the overall spot price of commodities has exceeded the peak of 2008. Among them, the price of copper, which is widely used as the basic raw material, has risen by 2000 yuan in the three trading days after the end of the National Day holiday. The price of tin in the London metal market has been refreshed.

As for the agricultural products related to the survival of downstream processing enterprises, the international soybean, corn and other continuous months have continued to rise, climbing to the commanding heights since the financial crisis. Domestic oil and fat raw materials also deduct a sharp rise, soybean oil, vegetable oil all rose 2000 yuan / ton or more.

The cotton market in the upper reaches of the textile industry is also popular. The cotton futures contract of Zheng Shang has nearly doubled compared with the same period last year. It is reported that in late July, domestic cotton prices were still around 16600 yuan / ton, and by October 11th, they had risen to 24500 yuan / ton, rising 47.6% in two and a half months, and domestic cotton prices saw a new high of 15 years.

"Weak dollar" brings the butterfly effect.

The commodity market is surging, which is likely to be a "protracted war" for "made in China". The mainstream view of the industry is that the behind the wheel of this round of inflation is not entirely a supply problem, but an international fund speculation and domestic hot money follow suit. Tao Dong, chief economist of Credit Suisse, called it "the exchange rate war caused by the excessive quantitative easing policy of the United States". In September 29th, the US House of Representatives passed the "exchange rate reform to promote a fair trade act" aimed at imposing special tariffs on countries that underestimate the exchange rate of the currency, igniting the global money market. Local time 12, the Federal Reserve announced the September monetary policy meeting. The minutes show that the Federal Reserve is ready to launch a new round of quantitative easing measures.

The Fed's attitude has triggered a global chain reaction. The Bank of Japan announced its interest rate cut from 0.1% to 0-0.1%. South Korea, Brazil and other countries have also said they will not sit idly by the exchange rate fluctuations. And the Bank of Australia, which is expected to raise interest rates by 25 basis points, has also stopped the pace of raising interest rates unexpectedly.

"The sharp fall in US dollar led to a surge in the price of US dollar goods." Wu Ling, manager of futures research center of new century, believes that at present, all countries are taking the US as the leader, and continue to implement the policy of easing up, so as to stimulate a large number of funds to enter the commodity market. Huang Haifang, an analyst at Soochow securities, also believes that the competitive devaluation of various countries has made obvious support for resource commodities.

As for how long this battle will last, Zhejiang merchants futures analyst Tang Fenglei said that the fourth quarter PTA futures will still have great room for promotion. "Due to the intensification of the exchange rate problem, there is still an expanding trend in the amount of money invested in various countries. The strengthening of the renminbi appreciation will stimulate the hot money to flow into the country, and the real estate regulation will start again, and the commodity market will be one of the main channels for hot money" flood discharge ". Tao Jinfeng also said that the "currency war" and the depreciation of the US dollar will continue. The bull market of commodities is far from over, at least for the second half of next year.

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Downstream businesses complain incessantly

"The rise in commodity prices is good for the upstream industry chain. Taking oil, mining profits are thickened. Ultimately, it is a good monopoly industry. The middle and lower reaches of the day are not easy to rise because of the rising procurement costs." Wen Baoshan told reporters that some flexible small shoe manufacturers in Jinjiang and Putian have even shut down the production line. "Our upstream suppliers of rubber products are also" sandwich biscuits ", and their economic benefits are also affected by the increase in oil prices.

Reporters learned that in addition to the rubber manufacturing industry, looking at the oil "face" industry also includes the same three synthetic materials as raw materials for plastics, chemical fiber industry, the largest fuel consumption of non-metallic mineral products industry and electrical machinery and equipment industry, as well as electronics, petrochemical, textile and clothing, food, building materials, forestry, medicine and automobile industries.

In addition, the cost of logistics spanportation in most manufacturing industries is also affected by the increase in oil prices. "The rise in oil prices has also increased the cost of automotive chemicals, such as plastics, plastic additives, seat foam mats, polyurethane dashboards, polylactic acid resin automotive interior materials, seals and lubricants." Li Yongjun, a senior commentator in the automotive industry, said: "this will be directly spanmitted to the procurement system of the first class auto parts suppliers."

In the world's largest home textile production base, Tongzhou District, Nantong, Jiangsu, a cost crisis triggered by the rise in cotton prices is also becoming a spark. Reporters from the Nantong municipal government open information to see, a survey shows that all sectors of production enterprises have assumed the cost pressure brought by the rise in cotton prices, the company's production profits have declined.

According to the more than 40 spinning enterprises, the average price of cotton purchase in October 8th increased by 45.77% over the beginning of this year, up 73.83% from the same period last year. Textile enterprises generally reflected that on the same day, the purchase price of 40 cotton yarn and 50 cotton yarn increased by 33.3% and 37.1% respectively from the beginning of the year, up 48.2% and 50% respectively compared with the same period last year. The industry also believes that the raw materials to steel, iron, copper, aluminum, zinc and other non-ferrous metals based hardware industry will also become "the hardest hit." "All these metal varieties have gone up almost all the same, plus the main component of the plastic is ethylene, and ethylene is extracted from petroleum, and the rise in oil prices is also squeezed the profit margins of enterprises."

Forced industry shuffle upgrade

Kong Xiangzhi, vice president of the school of agriculture and rural development of Renmin University of China, believes that it is not a good thing to look at the upgrading of the textile industry. "China's textile industry is facing a great change in the past 10 years. If the textile industry without timely spanformation will be abandoned by the times, the industry will turn to the production of our own national brands or the textile with high added value. Shall we take this opportunity to spanition from a big textile country to a strong textile power?"

"In the macro environment where production costs are rising and demand growth is slowing down, only those companies with monopoly capability can digest the upward pressure of upstream costs through economies of scale and technological innovation, or, because of the pricing power of product market, they can smoothly spanfer upstream costs to the downstream market, thereby continuing to maintain a higher gross margin level and achieve sustained growth in performance." Xu Gang, general manager of CITIC Securities Research and consulting department, said: "monopoly capability is mainly manifested in resource monopoly, production technology monopoly, industry control barriers, brand monopoly, channel monopoly and economies of scale."

Qiu Yuanbin, a former chairman of the national hardware and electrical media alliance, supports that it is impossible to completely resolve the upstream cost factors. "Who has the strength of the enterprise, the bulk of the procurement is large and the cost is low, so who will be the last to increase the price of the finished product, so the industry shuffle is inevitable, and the survival of the company in the no break up price must be an enterprise with strict management and effective cost control."

Blue silk feather Textile Co., Ltd., responsible person told reporters that the company has taken innovative production technology, improve the utilization rate of corner waste to resolve the pressure on the upstream cost increase, the company's utilization rate of raw materials in September increased by 1% over the beginning of the year.

"We have actively developed new patterns and new varieties, and excavated the market development space to improve product sales. In September, the sales volume of products increased by 8% compared with the beginning of the year." The company also launched a risk management mechanism, "we shortened the order cycle, only received short delivery orders in about 3 months, and ordered yarn in advance, and signed more than two months supply contracts with suppliers, all of which can reduce future cost pressures," said people concerned with the company.

Double logic of structural adjustment

In the view of Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce and international trade and economic cooperation, the rising price of the international market may change the comparative advantage of some domestic industries, or at least shake the existing pattern. "China should respond not only to the import and export trade, but also from the industrial links behind the trade, so as to match the adjustment of industrial structure with the trend of rising commodity prices in the international market."

Zhang Liqun, a researcher at the Ministry of macroeconomic research of the State Council Development Research Center, also believes that in a more comprehensive and intense market competition, the space for cost drivers to be released through price increases is small. "On the one hand, enterprises will form more cost reduction factors in terms of saving and improving labor productivity, and on the other hand, they will also push forward economic restructuring and upgrading and optimization of industrial structure more forcefully." Wang Jian, Deputy Secretary General of the Chinese society of macroeconomics, agrees with this view. The larger the export scale of high value-added products, the more capable they will be able to offset the rising prices of primary products. Because the raw material content of high value-added products is low, such as the IT industry, raw materials account for only 3% of the cost, and the key is high technology content and high knowledge content. He told reporters that the faster the growth of high value-added products in economic growth, the stronger the ability to digest raw materials. "Therefore, the rising prices of primary products may also promote the upgrading of China's industrial structure and trade structure."

Wen Xianjun, vice president of the non-ferrous metal industry association, has said that the central task of the "12th Five-Year" of the nonferrous industry is structural adjustment. Among them, the large metal varieties focus on the adjustment of the industrial structure and the layout of the production capacity, and the small metal varieties, especially in our country, which have the advantages of reserves, will further emphasize the orderly development of the resources, the use of saving and the merger and reorganization of the enterprises.

However, Ma Xiaohe, deputy director of the national development and Reform Commission's Macro Economic Research Institute, pointed out that China is a resource shortage country. Before the economic development mode has no substantial change, the price increase of international bulk resources will obviously increase the cost of investment in the economic development of our country, and bring greater pressure to the spanformation of the mode of economic development. According to the analysis of the insiders, if the commodities continue to lose their rational skyline, the enterprises that are caught off guard will be reduced to invest in the structural spanformation such as upgrading equipment and optimizing production lines.

Change of traditional energy structure

In addition to the need to adjust the pace of industrial restructuring to meet the fluctuation of international commodity prices, the international market through the industrial chain to the cost pressure of almost the entire manufacturing industry gives another revelation. Reporters noted that in many commodities, the impact of excessive dependence on oil and coal has the greatest impact. Data show that since 1990s, China's oil consumption has increased by 14 million tons a year, with a growth rate of 7%.

Comparing the proportion of China's oil consumption to the primary energy consumption structure, the reporter found that from 1970 to 2008, the proportion of China's consumer oil rose from 12% to nearly 20%. "This structural change shows that China's economic dependence on oil is rising." Niu Jianying, who engaged in energy strategy research at China University of Geosciences, told reporters that soaring oil prices in the international market will inevitably reflect the increase in import costs, the increased burden of government financial subsidies, and the cost of downstream industries through the industrial chain.

Chen Hao, director of the economics school of Zhongnan University of Economics and Law, believes that the adjustment of the price, wages and interest rates in the domestic market will lead to a lag in the fluctuation of oil prices, so that the available resources can not be fully utilized and the economic output will be reduced. At the same time, the cost of wealth spanfer, which is dominant in the cost of oil dependence, will remain high, which will cause a heavy burden on economic expenditure.

"On the one hand, on the one hand, we need to improve the development and market cultivation of renewable energy. On the one hand, we need to formulate a series of policies to ensure the efficiency of oil use, so that our economy will have an endogenetic quality to resist rising oil prices and reduce economic dependence on oil." Niu Jianying said.

Reporters learned that the United States began industrial restructuring since the end of 1970s. The United States, the European Union and Japan have shifted the high energy consuming traditional industries to overseas and vigorously developed the use of energy saving technologies, so that the dependence of economic growth on resources has been greatly weakened. According to BP statistics, the US energy consumption per million GDP in 2007 was 251 tons of oil equivalent, which has been reduced by 52% compared to the 524 ton oil equivalent in 1970. In the same period, the energy consumption of Japan's million dollar GDP decreased from 277 tons to 177 tons, and also reduced by 36%. However, Niu Jianying also said that China's current industrialization process has shown a rigid demand for oil consumption. "While looking for alternative energy sources, we should also gradually liberate the domestic oil market under existing conditions, promote the smooth spanmission of oil prices, improve the role of market allocation of energy supply and demand, and regulate and access restrictions in key areas related to the lifeline of the national economy." She believes that the safety assessment and early warning system of key industries is also indispensable.

Extended observation

Manpower costs rise to help industry adjust

Reporters also learned that another factor that makes manufacturing enterprises difficult is the rapid rise in labor costs. The latest report of the Chinese entrepreneur survey system, jointly sponsored by the human resources research and training center of the State Council Development Research Center and the national economic statistics and Statistics Department of the State Statistical Bureau, shows that nearly 80% of the business operators believe that the upgrading of raw materials and labor costs is the biggest challenge facing the enterprises in the future. 97% of SMEs indicated increased labor costs.

According to the reporter, in the various sub sectors of the manufacturing industry, the textile and garment fur industry is the most densely populated industry, with the lowest average wage, the highest proportion of wage cost in total business cost, and the most sensitive to the change of human cost. Zhang Bin, an analyst with state securities, believes that short-term textile and garment industries will face painful spanformation. "Competition in these industries has been abnormally tragic, especially in small and medium-sized enterprises. The price war" in the competition "is built on the difference of labor costs, taxes and so on. After a gradual rise in wages, small businesses with poor competitiveness may eventually be closed.

His view also holds that, in the medium to long term, as the cost of raw materials increases, the rise in labor costs will also push enterprises to upgrade their industries and enhance the competitiveness of the industry through industry reshuffle. Wang Hanfeng, former strategist of CICC, also predicted that the merger and reorganization of Chinese traditional manufacturing industries, including iron and steel, coal, building materials, food and beverage, textile and garment industries, will be concentrated, and enterprises already in the leading position of the industry and with relatively good balance sheets and cash flow conditions will benefit from this trend.

"Low wage mode can rapidly expand employment and accumulate capital in the short term, but because labor intensive enterprises rely too much on low cost labor input, innovation power is insufficient, thus hindering the upgrading of industrial structure." A professor at the Department of international economics and trade of Fudan University told reporters that the low wage mode was not conducive to the expansion of domestic demand, and that there was not enough consumer demand to support it.

Regarding this, Gu Shengzu, deputy director of the Standing Committee of the National People's Congress and the judicial committee of the interior, also said that the difficulty in employment has now become a major problem. The main reason is that the labor force has shifted from unlimited supply to partial shortage, and the rapid increase in the wages of migrant workers in China is conducive to the formation of a forced mechanism for enterprise innovation.

Zhang Benbo, a Social Research Institute of the Institute of macroeconomics, believes that with the increase of labor costs, the low end industries will face greater cost pressures and will shift them from coastal areas to the central and western regions. "In the process of rising labor costs, through the industrial undertaking among regions, we can digest the phenomena of reduced employment and capital outflow."