[China Glass Network] Zhang Weizhong of Haining Rida Warp Knitting Market Department is concerned about the daily work, in addition to looking for customers to take orders, is to track the new development of oil prices, because the price of oil is closely related to the profitability of warp knitting enterprises. “As the cost is getting higher every day, the pace of RMB appreciation is also accelerating, and our business is getting harder and harder,†he said.
A recent survey shows that tens of thousands of small and medium-sized foreign trade companies in China are facing a severe test. Foreign trade surveys from six major exporting provinces of Guangdong, Zhejiang, Jiangsu, Liaoning, Sichuan, and Hubei show that about half of the profits of these enterprises have declined, and some enterprises have increased or even closed down.
When reporters recently interviewed export enterprises in the textile and chemical materials industries of our city, they learned that under the environment of increasing inflationary pressures and shrinking profit margins, raw material costs are “high fever†and rising renminbi pairs. The US dollar exchange rate is becoming an annoyance for the growth of foreign trade enterprises in our city.
Rising costs orders difficult <br> currently in commodities, raw material prices and the appreciation of the renminbi under the joint action, small and medium foreign companies have been approaching "mark of life and death."
Zhang Weizhong calculated the account for the reporter. Since last year, the price of warp-knitted raw materials, which has been driven by the rise in oil prices, has risen by 30%. This part of the cost pressure can only make customers bear 20%, and the remaining 10% must digest themselves. . This way, the profit margins that were originally stretched out are even worse. "Now we can only say that we are barely maintaining production." He told reporters that the situation in Haining's warp knitting industry is very common nowadays. Even some enterprises can only close the door because they cannot receive orders.
“There is another problem that plagues us is to limit electricity. Every time the power-limiting gate is closed, enterprises can only use their own diesel generators to generate electricity, so the cost per kilowatt-hour is three times that of the original. Our cost has increased by 10%." Zhang Weizhong sighed. It is reported that the power supply and demand situation in our province is extremely severe this year, and the seasonal and long-term power supply tension is a foregone conclusion.
A company involved in PU leather products in our city is also troubled by the high price of resources. The relevant person in charge of the company told the reporter that a considerable part of the raw materials for PU leather comes from petroleum extracts, which have already increased by 5% to 40%.
The encounters of the above two companies reflect the dilemma of a considerable number of foreign trade enterprises in our city. According to the survey, the production cost of foreign trade enterprises in the city of over 80% has increased.
Increase in the number of non-profitable companies
Wu Hao, director of the Foreign Trade Department of the Municipal Foreign Trade and Economic Cooperation Bureau, which recently ended the group exhibition work of the Canton Fair, felt the same about the cost pressures encountered by enterprises. She told reporters that in addition to oil prices and electricity consumption, labor costs, rising financing costs and the appreciation of the renminbi, several pressures have pushed the export costs of enterprises up by 10 to 20 percentage points.
During the current Canton Fair, the RMB exchange rate against the US dollar broke through 6.5 for the first time. A market person in an electric appliance company in the city said that for every 1% appreciation of the RMB, the company will face a exchange loss of US$16,000 or more than RMB100,000. Reduce by about 5%. In order to cope with exchange rate changes, companies have to raise prices frequently to make up for lost profits, which may impact orders.
According to the monitoring data of the Municipal Foreign Trade and Economic Cooperation Bureau, the proportion of enterprises with falling profits and flattening since the beginning of this year accounted for 69.9%. Although it is better than the provincial average, the situation is still grim.
The more direct impact of cost pressures driving price increases is the decline in export competitiveness, with foreign customers actively looking for alternative suppliers to transfer orders to other, less expensive regions or countries.
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