Construction machinery passed the spring of 2007 and continued to maintain rapid growth in 2008. But the worldwide financial crisis has had a negative impact on the development of construction machinery. This is the cost constraint from the upstream of the industry.
Constraints from the upstream of the industry include two aspects. One is the price increase of steel raw materials, and the other is the price increase of parts import costs. Both of these factors are related to the worldwide inflation of the financial crisis.
There are two kinds of inflation. One is demand-driven inflation. This kind of inflation often has a positive impact on the company and promotes the rapid development of the economy. One is cost-driven inflation, which increases the cost of the enterprise, but compresses the profit margin of the enterprise, often having a negative impact on the enterprise and causing the economy to become stagflation.
Since 2008, the global economic inflation driven by the US dollar has been caused by the US weakening domestic demand, stimulating investment, and expanding capital currency too fast. The US subprime mortgage crisis is caused by the lack of repayment ability of US lenders and the tightening of demand. In order to solve the crisis, the United States recently announced that it will continue to inject capital into its subprime crisis, which further increases expectations of the depreciation of the US dollar. Affected by the US dollar, other countries in the world have to keep up with the speed of currency expansion in the United States, leading to a relative depreciation of credit currencies. In a world where credit is seriously threatened, it is natural for the prices of raw materials such as steel to rise.
Because this expansion is a stagflation property, and China's construction machinery is in a weak link in the global industrial chain, it will inevitably bear the cost pressure transferred by upstream enterprises. Due to the price increase of parts and components, about 70% of the profits of the Chinese construction machinery industry are eaten by imported parts. According to the latest statistics of the Hunan Mechanical Engineering Association, the import cost of parts and components in the mainframe products produced by engineering machinery enterprises above designated size accounts for more than 40% of the manufacturing cost. Take a leading enterprise of domestic construction machinery as an example. Among its export products, the cost of purchasing foreign parts and components accounts for 30% of the export price. In 2007, the leading enterprise earned 500 million U.S. dollars in exports, and it took a purchase of foreign parts. 2 billion yuan, foreign parts accounted for 40% of sales of export products, but accounted for 70% to 80% of profits.
Not only that, although the technical competitiveness of China's construction machinery products is still very weak, but the total export volume of products is very large, which has caused the joint ban of overseas counterparts. At present, the main imported components of China's construction machinery industry include hydraulic components, engines, control components, and transmission systems. In particular, foreign suppliers of hydraulic components and special steels have begun to formulate “overlord clauses†by relying on market monopoly status. Some international large-scale component manufacturers have also joined forces to design parts of the same size for Chinese companies, so that China's export products compete on the same quality. Some of the products produced by multinational parts manufacturers in China are even products that have been eliminated in developed countries such as Europe. But even so, Chinese companies are not easy to buy.
In terms of the cost of steel raw materials, in 2008 China adopted a series of measures to control the export of the steel industry to reduce the cost of domestic steel materials, but in the case of global stagflation, it still could not hold the steel price increase of 10% in 2008. Expectations around. With the introduction of iron ore negotiations, domestic and international steel prices have risen sharply. Japanese and US steel prices have risen by more than 10%, and individual varieties such as ship plates have even increased by $200/ton. At present, in the comprehensive cost of production enterprises in the construction machinery industry, steel accounts for 40% to 70%, and different products and different models are different. The products that are not sensitive to the price of steel are pump trucks and tow pumps with relatively high unit prices; while the cost of steel for loaders, road rollers, truck cranes, forklifts, etc. accounts for about 20%, while the engineering machinery industry has excess capacity and the products tend to be homogeneous. The company has limited ability to raise prices.
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