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How much impact will the price increase of building materials have on the market?

A few days ago, the news of building material price hikes appeared on the top search lists of today's headlines, showing the wide range of influence.

Since the end of September, price increase notices issued by some companies have been widely circulated on the Internet.

The impression given to the outside world is that this round of price increases for building materials has affected various categories, and it is really going to increase, not a fake move.

So, what is the real situation? Let's see what some more authoritative media channels say.

According to a report by the China Real Estate News, "The building materials industry will increase prices across the board, and the upward trend is expected to continue in 2022", several key information is mentioned:

(1) On October 8, the price of steel broke through 6000 yuan/ton, and rose by 80 to 100 yuan per ton. PVC materials, which are closely related to doors and windows, rose by 2.76%, and the highest price even exceeded 12,000 yuan/ton; raw materials for sealing tape were "money but not available."

(2) According to incomplete statistics, hundreds of ceramic factories in about 20 provinces, including Guangdong, Guangxi, Fujian, Jiangsu, Zhejiang, and Shandong, collectively issued price increase letters to increase prices at the same time around October 1. Meitus issued a notice on price adjustments for engineering products, and the price adjustment range was a 10% increase in the sales price.

The "Red Star Capital Bureau" under the Chengdu Business News published "The price increase of bulk commodities has been transmitted to the terminal! The decoration materials are generally rising, and evening dresses will cost tens of thousands of yuan more for a few months." The key information mentioned in it is:

1. On October 11, I visited a certain building material market in Sichuan and found that around the National Day, manufacturers of ceramic tiles, ceilings, panels and other building materials have issued price adjustment notices, and some dealers have also begun to increase terminal prices.

2. The increase in the ex-factory price of cement was quickly passed on to the terminal. "Lafarge 425 Cement" and "Southwest 325 Cement", which are commonly used in decoration, have 20 bags per ton. The sales price before September 22 is 36.8 yuan/bag and 29.5 yuan/bag; on October 11, two All brands of cement rose by RMB 10/bag.

3. The raw materials required for the production of doors and windows, aluminum ingots, glass, hardware, hollow plastic, packaging materials, etc., have also risen to varying degrees. The price of titanium, an important raw material for ceramic tile production, has continued to rise this year.

According to another report, several price increases this year have led to continuous price increases of downstream products. The prices of commonly used plastics such as EVA, PC, and PVC have repeatedly hit record highs.

There are many factors for this kind of price increase, such as the impact of domestic power restrictions and production suspension, as well as the price increase of raw materials. At the same time, affected by the epidemic, extreme weather, environmental protection, and freight transportation factors have all driven up prices.

Some listed companies have announced that due to the shortage of power supply, there has been a temporary suspension of production lines. The occurrence of a decrease in supply,

Although there are many voices of price increases, the impact on terminal consumption depends on the industry.

Some categories are in a fully competitive market, and it is difficult for the terminal to raise the price. Either the factory manager himself bears the pressure of rising costs, or the distributor absorbs the pressure of rising ex-factory prices.

In this case, the requirements for the health of the company's funds and the ability to withstand pressure are relatively high. If you want to maintain a product's high price-competitive advantage, you can only find a way to prevent a substantial increase in product prices.

In some industries at the stage of oligarchic competition, leading companies rely on strong competitive advantages to occupy most of the market share, and then control the pricing power of products. Such price increases will cause obvious pressure on the demand side.

A worse situation is that if the price increase lasts for a long time, the purchase cost will rise, but the sales price to customers will not rise, and the internal cost will not fall. Such a company will be more dangerous.

Perhaps one possible impact is that after the price increase news is widely circulated, it will be transmitted to the consumer end and affect customers' purchasing decisions. For example, some buyers worry about the subsequent price increase, but instead place orders in advance to help the store increase customers. .

Looking at it for a longer period of time, Dacai Research believes that the pricing of some categories and brands should be steadily rising, especially for the successful creation of some high value-added brands, price increases will be a normal phenomenon.

In the context of economic prosperity, rising incomes, and continuous expansion of middle and high-income groups, price increases in some categories may become a regular phenomenon, and annual price adjustments will no longer be new.

Dacai Research believes that the future market may be full of more variables. We must make adequate psychological preparations and resource preparations, properly accumulate some funds, improve our internal strength, and pay attention to the trend of the market in order to better cope with emergencies. Variables such as price increases.