The inevitable choice to control costs for development

In recent years, due to the soaring price of copper cable in the world, the cost of domestic cable has soared, and almost all the flexible cable companies are facing serious crisis costs. Some flexible cable companies to change the grid operating units tender, and improve the contract price have been signed so that the flexible cable companies can survive. But more and more companies began to compete for the irregular, at the same time, due to China's flexible cable companies, small and scattered, exacerbated by the flexible cable industry disorderly competition, lower prices phenomenon. In the face of rising raw material prices, flexible cable costs, production companies show the most helpless". 

Because of their power, communication, transportation, or iron and steel industry signed orders, delivery cycle general in more than a year, wait until the day delivery, the contract price often even cost not to come back. Once the contract is signed, the price can not change, therefore, the cost of raw materials prices rose by the enterprise to bear.

Copper, aluminum, and other major raw material prices, the survival of the flexible cable industry have a serious impact on the foreign cable companies to respond to the price of raw materials. Foreign cable companies have established a good risk control system, through with suppliers to sign long-term supply agreements, hedging, and futures contract, to avoid the risk of price fluctuation of copper and aluminum; take a centralized purchasing department, improve the bargaining position of the company and its suppliers, to strengthen and improve the raw material control system and mechanism of risk. 

Some companies, such as Nexon, are superior telecommunications companies to extend the industrial chain, especially copper material supply areas, which weaken the copper price risk; multinational corporations establish control risk mechanisms of interest rate and exchange rate fluctuations. National Co in the assets and liabilities rate is far lower than the Domestic Company, generally maintained at around 30%, the company's assets are relatively high security.

Due to the cost of flexible cable in a sharp rise, its sales price is difficult to improve. Therefore, market competition is becoming increasingly fierce, especially in technical additional value is relatively low in the low-end flexible cable products in the market, lower prices competition situation is quite common. The industry believes that the fundamental cause of the low price competition is blind investment, overcapacity, and oversupply. On the one hand, due to the low investment threshold, resulting in a large number of enterprises into the industry, resulting in the industry's excessive". It is understood that the size of the flexible cable industry enterprises is up to more than 8000. The production capacity of these industries exceeded the market demand, there is a serious excess. 

On the other hand, due to the low "threshold" not only industry concentration is getting lower and lower, and make parts simply do not have the production capacity, quality control, and detection means necessary "workshops" can occupy a place in the industry, become a fake and shoddy, shoddy, steal workers reducing material, shoddy cable products of origin, and with lower sales price means to disturb the market competition order, aggravated disorderly competition in the industry.

A flexible cable company believes that the price increases, the cost of a substantial increase, some small businesses can not afford, and some are even terminated. But the market still has a certain percentage of millions of cable orders. But the purchase of our users is not willing to accept the price increase the cost of the flexible cable. Flexible cable companies are very confused, some enterprises have to sign a contract with the user, and the cable price adjustment can be, but if the demand for another flexible cable, we must do. Tsutsumiuchi loss diwan fill ", to compensate for the loss of the. This is the cable industry's unique "overlord clause", which reflects the difficulty of the flexible cable industry in the soaring copper prices.

Obviously, whether unilateral raw materials prices, or the cable industry's unique "overlord clause", force the flexible cable industry to seek a new development path, whether it is R & amp; d more stable performance, low-cost aluminum alloy cable, or modify unreasonable "overlord clause", or to reduce costs through strict flexible cable cost management and more advanced production technology and the process is very necessary. Especially in recent years, the flexible cable industry continues to lower profit margins, in the low-end market competition is becoming increasingly incandescent lamps and needs more flexible cable manufacturing enterprises from the cost point of view, drip.