Cost is another big factor in investment considerations. Since 2021, the price of crude oil, iron ore, copper, aluminum and other commodities has risen sharply, which has greatly squeezed the profit margin of the manufacturing industry, making the investment in the manufacturing industry more prudent.

PFCL201CE-50KN Taking iron ore as an example, the country will import 1.12 billion tons of iron ore in 2021, with an average price of $164 / ton, up 55.3% year-on-year. Since the beginning of this year, in the face of changes in iron ore prices, the National Development and Reform Commission has spoken out 7 times a month to strongly regulate the iron ore market, but so far the iron ore heat has not completely cooled down. In order to ease the pressure of iron ore price increases, steel processing enterprises did not sit idly by, they also participated in the import business of iron ore. The relevant person in charge of the China Iron and Steel Industry Association said that now the major domestic steel mills have procurement departments to carry out imported iron ore business. However, unlike ordinary traders, the main task of these purchasing departments is to reduce the import price of iron ore under the premise of ensuring quality, rather than hyping iron ore for profit.

In the face of rising raw material prices, another common PFCL201CE-50KN practice for manufacturers is to participate in futures trading of commodities. The copper price increase in 2021 once hit a record high, with the annual spot price averaging 68,490 yuan/ton, up 40.5% year-on-year. The cost of copper in the cable accounts for almost 70% of the total cost, so the reaction of the cable manufacturers is very fierce for the slight price changes in the copper price. The “roller coaster” market of copper prices in 2021 has made cable companies complain. Therefore, some powerful cable companies often directly participate in international and domestic copper futures trading to hedge the adverse impact of sharp fluctuations in copper prices on enterprises.

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PFCL201CE-50KN In addition, the cause of the epidemic in the past two years has exacerbated the problem of “difficult and expensive recruitment”. Changyuan Group, whose main business is smart grid equipment and smart equipment, recently released a news that the annual loss in 2021 will be more than 880 million yuan, one of the reasons is “due to the increase in personnel preparing for new projects and the increase in human costs caused by changes in social security relief policies during the epidemic stage.” The dividend of China’s population is declining, and the salary of employees can not be unlimited, and a more common way to crack the difficulty of recruiting workers is to replace machines, which is also a reason why the sales of smart devices have been optimistic in recent years. For non-machine operation positions, thinking and thinking about how to establish a stable and long-term relationship with employees, such as providing employees with options and solving the problem of studying the children of remote employees, are the ideas of some entrepreneurs at present.

The composition and change of enterprise cost is a comprehensive PFCL201CE-50KN  factor, which not only involves the upstream and downstream, but also involves the internal enterprise, and is also related to the political and economic environment. In order to ensure the stable growth of the manufacturing industry, the state has given full support in terms of policies. In February this year, the National Development and Reform Commission and the Ministry of Industry and Information Technology jointly issued the “18 articles” on industrial policy (namely, “Several policies to Promote the Steady Growth of Industrial Economy”), respectively from strengthening fiscal and tax financial support, tapping the potential of investment and foreign trade, breaking the supply bottleneck, stimulating the vitality of market players and other aspects of the promulgation of 18 policy measures. Its purpose is to safeguard industrial growth.

For the industrial sector, the same is true of this year’s economic growth targets, and the manufacturing sector shoulders a significant and honorable responsibility.