The price rise in 2021 can not be better described as "one wave is not flat and another wave is rising", even though all industries are lamenting that food is difficult! But it also failed to stop the rhythm of "price rise"

A few days ago, Xinnuofei also launched the second price increase since the outbreak of the epidemic for the US market and Cooper lighting solutions. However, the rise has not stopped. On March 30, Hubbell Lighting, an American lighting company, sent a notice of price increase to customers and agents. It is worth noting that this is the second price adjustment of the enterprise.

Hubbell Lighting said that the global epidemic had an impact on the supply chain, which led to a significant increase in raw materials and transportation costs. Therefore, from June 1, 2021, the company will implement an additional price increase of up to 6% for a series of affected lighting and control product solutions.

In fact, not only the lighting enterprises ushered in the second price rise, but also the fields closely related to the lighting enterprises, such as chips, power supplies, copper, aluminum, acrylic, and paper, experienced multiple price rises.

For example, Jingfeng Mingyuan, which has attracted more attention in the field of LED lighting driver chips, sent the Notice of Price Adjustment on January 5, March 12 and April 1, 2021, respectively, It was decided that "the product price will be adjusted to varying degrees according to the specific product model, and the adjusted new price will be applied to all orders and new orders that have taken effect but have not yet been delivered. The price adjustment range and order operation mode of specific products will be subject to the actual communication of the company's business personnel." It can be seen that the impact of this impact can not be avoided at home and abroad, or in all links of the entire industry chain, Some raw materials related to LED lighting have even doubled in price.

It can be said that the price rise in 2021 will have a wide impact, a long duration and a strong impact. How about the price rise in the fields closely related to lighting enterprises when the fact that the price rise of raw materials is irreversible? Will it promote the industry to face the second and third price increases?

01. The fact that raw materials are rising is irreversible

It is observed that since the second half of 2020, with the recovery of the epidemic situation, various industrial raw materials have ushered in a wave of price hikes. Among them, chips, resistance capacitors, PCB boards, diodes, etc., which are closely related to the LED lighting industry, have a direct impact on the ups and downs of the price of LED lighting products. In this regard, the author has sorted out the price increases of some core components in the production of LED lighting products, so that everyone can have a clearer understanding.

02 Chip growth is generally 10% - 20%

In the whole wave of price rise, the wave caused by chips is the largest, which also stems from the fact that the whole society is increasingly dependent on chips, which has penetrated into various fields, including LED lighting industry. Chips are one of the important components of LED lighting products, and have an obvious impact on the price rise of the industry.

Since April, on the one hand, chip factories such as SMIC International, Ruixin Micro, and Jingfeng Mingyuan have all increased their prices, generally between 10% and 20%; On the other hand, individual stocks in the semiconductor sector rose collectively. It is reported that more than 50 upstream semiconductor manufacturers around the world have announced price increases. On the news side, the price rise trend of semiconductors started at the beginning of the year has not decreased, and the delivery period of related products has also been extended. On the premise that the epidemic situation has improved, the recovery of downstream demand is particularly strong. In addition to the obvious situation of "core shortage" in the automotive industry, the seemingly calm LED lighting industry has also started an open and closed fight against "supply" in the case of tight supply and large price fluctuations.

Some insiders pointed out that each round of tight production capacity is the beginning of a major reshuffle of companies in the industry. In the case of tight production capacity, the chip design companies with production capacity, such as wafer factories and packaging plants, will benefit fully and gain competitive advantage in the market, so as to achieve faster growth. The LED lighting industry is the same. Enterprises with orders and strong profitability will be stronger in the storm.

03 PCB rise caused by CCL

As the material foundation of the entire electronic industry, CCL is the basic material for making PCB (printed circuit board), the carrier for electrical interconnection of electronic components, and closely related to the global economic cycle. The prices of copper foil/resin/fiberglass cloth of the three major raw materials upstream of CCL have risen to varying degrees. The rise in the prices of raw materials and strong demand have triggered the rise in the prices of CCL downstream, and the leading enterprises have also raised the prices of downstream PCB manufacturers for many times.

Among them, we found that copper, which is known as the "leader" of bulk commodities, has entered the upward channel since the second quarter of 2020. In addition, the demand for lithium battery copper foil is strong, and the supply of electrolytic copper foil falls short of demand, resulting in a gap between supply and demand. Since February of this year, copper has started a round of "storm" of price increase, and it has become increasingly fierce, once breaking through the threshold of 70000 yuan per ton, reaching a new high in nearly a decade. In addition, CCL manufacturers are putting pressure on the downstream by transferring the cost of upstream raw materials. It is expected that the economy will recover after the epidemic, and CCL will enter a new cycle of price increase from 2020 to 2021.

It is understood that most CCL plants have realized cost transfer, and some have higher premiums (increased gross profit margin). At present, the visibility of CCL orders is high, ranging from one month to four months, with an average visibility of 2-3 months; However, the shortest delivery time is extended by 1 week, and the longest is extended to 1 month (2-4 times of the usual). The market is extremely hot. Some insiders said that the CCL industry is expected to be in a high profile at least until the second quarter of this year, and the price increase may continue.

At the same time, the global economy rebounded from the epidemic in 2021, and China's economic growth led the world. After the epidemic, downstream enterprises' production recovered, and physical demand for copper increased significantly. However, upstream enterprises' raw material capacity was insufficient, and the supply was still low. The supply of various social stocks and scrap copper was limited. The contradiction between supply and demand was an important reason for the rise in copper prices. Copper is expected to exceed 100000 yuan/ton in 2021, and there may be a significant correction after the breakthrough.

04 - Paper Industry issued another letter of price increase, with a maximum increase of 2000 yuan/ton

The paper industry related to the lighting industry has issued price increasing letters in succession recently, and the price of paper has risen by more than two digits. Since this year, the price of paper products has experienced several price hikes, and the share prices of relevant listed companies have also continued to show some performance. This round of price rise is closely related to the rise of pulp price.

According to the analysis, pulp futures have been rising since November of last year, and have been rising rapidly since the Spring Festival. At present, the price of pulp futures has risen by 65.6% compared with the price of 4500 yuan/ton before the rise. The Oriental Securities Research Journal said that under the situation of good supply and demand, the price of white cardboard will continue to rise, and its high price is expected to continue to the second half of 2021. Since then, the trend of the supply and demand relationship has been directly related to the release rhythm of new capacity of white cardboard.

One ring at a time. With the increase in the prices of various raw materials, many domestic lighting brands have also announced the official price increase since April 1 (today).

For example, Oupu Lighting will appropriately adjust the price of offline products, with an increase of about 8% - 12%, which will take effect from April 1. The price adjustment of Sunlight will increase by about 5% - 10% this round, which will be implemented on April 1, 2021, subject to the DMS system price of the company. Foshan Lighting will appropriately adjust the prices of industrial and mineral products, with an increase of about 5% - 15%, which will take effect from April 1. The overall increase of Sidon Lighting is 8% - 15%: the increase of commercial lighting products is about 10%, the increase of home decoration products is about 8%, and the increase of industrial public construction products is about 15%. The price adjustment may take effect from April 1

And LED chip enterprises and foreign licensed enterprises take the lead in issuing the second notice of price increase, will it cause domestic licensed enterprises to follow suit? How much impact will chips, copper, acrylic, etc., which have been rising all the time, have on the LED lighting industry? How will enterprises cope? These questions will become the most vexing ones for everyone.