Machinery / Industrial Parts & Tools

1. Prices of the four major domestic excavator brands have all increased

Recently, the four major domestic excavator brands-Sany, Xugong, Lingong, and Liugong have issued price increases announcements, deciding to increase the price of small digging by 10% and 5% for medium digging from June 16. According to the price increase announcements of various companies, this price increase was mainly caused by the increase in raw material prices. The specific price adjustment policies and reasons are as follows:

2. Construction machinery will start three rounds of "price hikes" in 2021

According to incomplete statistics, this is the third round of price increases in the construction machinery industry this year.

The first round of "price increase" was initiated by the agent group at the end of February and early March this year. The price of small and medium digging (below 20 tons) was raised by 10,000 yuan, and the price of medium digging (20-29 tons) was raised by 20,000 yuan. Big digging (above 30 tons) is raised by 30,000 yuan. The main reason for the increase in the price of the agent group in this round is the low price and vicious competition in the industry. Many agents behind the hot sale of excavators did not benefit, and even suffered losses. Therefore, the agents took the initiative to cooperate to promote the price increase of excavators. This is also a move for agents to save themselves and seek development.

The second round of "price hikes" was in May this year, initiated by some OEMs of construction machinery, and was mainly caused by rising steel prices. Steel prices continue to rise, and the construction machinery industry that uses steel as raw materials has been the most affected, such as tower cranes that use large amounts of steel. In this context, industry companies producing tower cranes and other products have announced price increases. From May 17th and June 1st, respectively, Zoomlion and Xugong Machinery will carry out the delivery of tower cranes and elevators for the entire series of products according to the net weight of the product, and the price will be increased by 1,000 yuan/ton; Shandong Lingong loader prices will be Different systems will be increased from RMB 8,000/unit to RMB 20,000/unit.

This round of "price hikes" is in June this year, led by the four major domestic excavator brands-Sany, Xugong, Lingong, and Liugong. The excavator market share of these four companies accounted for more than 60% of the entire excavator market, and their simultaneous price increase has a much greater impact on the market than the previous two. This round of price increases is also mainly transmitted from the upstream steel and other raw materials. Various companies have raised the prices of small digging by 10% and medium digging by 5%.

The three rounds of "price hikes" in the construction machinery industry this year are summarized as follows:

Third, the price increase of construction machinery products may be difficult to sustain

Judging from the three rounds of "price hikes" this year, the price hikes of construction machinery OEMs are mainly affected by the rising prices of upstream steel and other raw materials. According to my steel network data, since mid-May this year, the comprehensive steel price of Mysteel has dropped from a high of 6,600 yuan/ton. As of June 16, the steel price has dropped to 5560 yuan/ton, a drop of 16 yuan in one month. %.

However, the current steel price is still about 20% higher than the 4,600 yuan/ton before the steel price rose in February this year, and about 43% higher than the 3,900 yuan/ton in the same period in mid-June last year. The current steel price is still at a high point, increasing the production costs of downstream construction machinery companies.

Mysteel believes that the purchase price of raw materials for construction machinery companies is determined at one time when signing the purchase contract, and the procurement cycle is 1-3 months, so it takes a certain time for the rise and fall of steel prices to be transmitted to downstream companies. The steel price decline this time began in mid-May. As steel prices continue to adjust downward and spread to the downstream, the price increase of construction machinery products may be difficult to sustain.