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The National Development and Reform Commission takes the initiative to "guarantee supply and stabilize prices", can the LED industry gradually stop it

Author : Shenzhen Crown Lighting

Update time : 2021-07-27 09:15:40

The National Development and Reform Commission takes the initiative to "guarantee supply and stabilize prices", can the LED industry gradually stop its rise?

From raw materials, chips, driver ICs, devices, to display screens, lamps, etc., the continuous price increase has caused many LED companies, especially small and medium-sized enterprises, to be miserable.

Now, this situation is expected to be improved to a certain extent.

On July 19, the National Development and Reform Commission held a press conference to introduce the economic situation in the first half of the year. Among them, Wan Jinsong, Director of the Price Department of the National Development and Reform Commission, answered reporters' questions regarding the trend of commodity prices.

According to reports, since mid-to-late May, the National Development and Reform Commission has closely tracked and monitored the price trends of bulk commodities, jointly held discussions with key enterprises and industry associations such as iron ore, steel, copper, and aluminum, and visited relevant trading centers, local and Key enterprises conduct joint investigations and special investigations, supervise and urge enterprises to operate in compliance with laws and regulations, and continue to strengthen the joint supervision of the futures and spot markets. Organized the completion of the first batch of national reserves such as copper, aluminum, and zinc.

Wan Jinsong pointed out that in the next step, the National Development and Reform Commission will organize subsequent batches of copper, aluminum, zinc and other national reserves, and pay close attention to abnormal market price fluctuations. Continue to strengthen the supervision of the futures spot market linkage, severely crack down on price hikes, hoarding and other illegal price behaviors, and maintain normal market order.

This action of the Development and Reform Commission is expected to alleviate the huge pressure of rising raw material costs faced by the LED industry.

Internal and external troubles, the LED industry collectively raises prices

Recently, the LED industry has been affected by external factors such as the epidemic, trade frictions, inflation, and internal factors such as tight supply, and the entire industry chain has seen price increases to varying degrees.

Changes in the macroeconomic environment cannot be resolved overnight, so I will not mention them for the time being. Among the factors of tight supply, the scarcity of metal materials is one of the important incentives affecting the price of LEDs.

In the LED lighting industry, large amounts of metal materials such as copper, iron, and aluminum are needed for brackets, wires, and structural parts. But recently, the prices of these bulk metal materials have soared and stayed high.

The price increase in the upstream is obviously transmitted to the downstream through the industrial chain. Including LED brackets, PCBs, heat dissipation substrates and other directly related components of led lights have also seen continuous price increases, and downstream led lighiting products manufacturers have to adjust the prices of their product lines to maintain profits under the pressure of upstream price increases.

In addition, the shortage of metal materials and price increases have triggered companies' hoarding behavior, which in turn has further aggravated the shortage of metal materials and increased the price increase.

On the demand side, due to the impact of the epidemic, market demand for distance education and telecommuting has risen; demand for products related to the home economy, such as mobile phones, computers, and health lighting, has also continued to rise. Global manufacturing capacity has already begun to concentrate in the Chinese market. In addition, the current foreign epidemic situation is volatile, and the capacity of foreign manufacturers has been greatly affected. China has effectively controlled the epidemic and quickly resumed production and operation activities, thus accelerating the concentration of global manufacturing capacity in the Chinese market. China’s LED industry ushered in a relatively rapid growth in demand.

However, the expansion of the LED terminal market has increased the demand for raw materials, and the supply contradiction has further intensified, and the price increase has also burned to the terminal display factory in the near future.

The price hike has already spread to the entire industry.

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