China's Auto Parts Raw Materials Price Increase Caused Zero Profit

Hits: Time:2010-11-9 9:13:08

Frbiz reports that raw materials prices continue to rise, constantly squeezing production enterprise profit.

The data shows that for main production materials - minerals, rubber, non-ferrous metal, chemical products, agricultural materials, energy, building materials, light industry raw material, steel material and so on - prices are rising.

During the first three quarters, the importing and exporting of raw material prices have soared. The data also displays that crude oil, iron ore and copper prices even reached 40%.  Among them, the aluminum products prices have reached 87.3%.

Under the raw materials price increase situation, some medium-sized and small enterprises can't cut prices. Many corporate profits are slashed, and even some of the best in the industry face an unprofitable and awkward situation.

Recently, the triangle tire, aeolus tyre co. ltd and other domestic large tyre enterprises announced rising prices between 5% to 8%. So far this year, the tyre industry as a whole has increased prices exceeding 12%.

However, this is not offset by upstream rising prices.  Frbiz reports that since 2009, the natural rubber has increased 300%, and the downstream industry cannot be too passive with price increases.

The tyre industry is not the only affected industry in the downstream.  Rubber sole of shoes production costs have greatly increased.  Therefore, downstream shoemaking enterprises cannot help but face the price pressure.

Tyre and shoes material are examples of raw material price increases, signaling that many companies are under raw materials price pressure.

Frbiz has pointed out that the purchased price index soar affects enterprises' profitability. In fact, Frbiz gets data from enterprises showing that raw material prices have largely affected corporate earnings -- some of the enterprises have even reported zero profit.


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