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Still buy it? The price of home appliances in the off-season is abnormally high.

With the arrival of a new round of price increase notices from home appliance companies such as Midea, the home appliance industry officially announced that it has been unable to fully absorb the increase in costs and must fall to the terminal, and users will bear part of it. Prior to this, many brands such as Aux Air Conditioning, Chigo Air Conditioning, Haier, Hisense, TCL, etc., have successively increased their prices.

01

After the Spring Festival, it was a low season for home appliances. This time in previous years is often a good time for brand discounts. But have you noticed that the prices of home appliances have risen quietly this year?

In fact, as early as the end of last year, the price of home appliances rose. Data show that in November 2020, the price of major home appliances increased year-on-year and ring-on-year, ranging from 100 yuan to 700 yuan.

This year, labor-oriented home appliances have the highest growth rate, up 20%-30% over the same period last year. Followed by kitchen appliances and TVs, the increase was about 10%.

In fact, this round of home appliance price increases is mainly due to the rise in the cost of upstream raw materials.

02

The raw material cost of home appliances can account for more than 70%. Since the second half of last year, copper prices have risen by 38%, alloys by 48%, aluminum prices by 37%, iron ore by 30%, stainless steel by 45%, glass by 30%, and cardboard boxes by 20%. , Foam packaging has risen by 15%, plastic has risen by 35%...

Taking air conditioners as an example, the overall cost of raw materials has risen by more than 20%. Many manufacturers bluntly said that they "cannot bear it."

Among them, copper, which is known as the backbone of the industry, achieved 11 consecutive increases, reaching the highest peak on February 25, rising to 70,260 yuan/ton, a record high in the past ten years!

Moreover, the price increase of home appliances is a lagging behavior, and there is no way to completely transfer the pressure of rapid increase in raw material prices. Therefore, many people believe that the home appliance industry will enter a stalemate stage. The seller raises the price and the buyer waits and sees. Both businesses and consumers are under the pressure of rising raw materials.

03

As the second pillar industry of electronic components, connectors are copper alloys for more than 99% of the base metal of the connector contacts. The huge demand means that the price of the connector is extremely susceptible to copper price fluctuations.

Tyco Electronics, the world's largest connector company, also had to issue a price increase letter, announcing a full price increase for its products starting from January 4, 2021, with an average increase of about 10%. However, when more companies encounter obstacles in price increases, they can only choose to digest them internally.

However, some professional analysis believes that the rising carnival of copper prices will not last forever, and there has been a shock and decline on March 5. In the future, with the recovery of the global economy, after the fourth quarter of this year, global copper mining and smelting will return to normal levels. By then, market supply and demand will tend to balance, and copper prices may be in a relatively stable state. Correspondingly, the prices of terminal home appliances and equipment will also fall.

04

During this time, connector and cable manufacturers are not completely passive. Amidst market fluctuations, companies should formulate a long-term price mechanism to actively respond to rising costs caused by rising copper and other raw materials. At the same time, we must clarify product positioning, seek new profit points, and do not fall into the "price-fixing" cycle, otherwise the company will be more passive and even be eliminated by the market.

The sea crosses the sea, showing the true qualities of a hero. The more tested, the better. In an environment where the survival of the fittest is intensifying. Faced with the pressure of rising costs, companies may wish to settle down, insist on technological research and development, and seize the window of development. From the price war to the value war, to win new business opportunities with innovation.