This year is the most difficult year for SMEs!
Since the beginning of the new year, there has been a continuous wave of vigorous price increases, from raw materials to matching parts, and now the butterfly effect, cruel consequences have appeared.
According to incomplete statistics: in the past year, 139 companies in the aluminum profile industry have been cancelled, 1,231 in the shipping industry, 95,556 in the furniture industry, 30,999 in the home appliance industry, 48,672 in the construction engineering industry, and 439 in the wind power industry. 85,905 companies in the automobile industry, 30,377 companies in the decoration industry, 24,772 companies in the real estate industry, and nearly 10,000 companies in the bridge and steel structure industries...
What is shocking is the coatings industry. According to incomplete statistics, in the past year, the downstream customers of the coatings industry, such as automobiles, home appliances, real estate, ships and other industries, have cancelled or even exceeded 320,000 companies. The industry prospects are worrying!
What caused the "wave of bankruptcy" of enterprises?
This year, apart from the normal survival of the fittest in the market and the increase in transportation costs such as the epidemic and floods, there are obviously more companies that have closed down this year than in previous years, and even some companies have been established in the industry for more than 10 years and have not been able to escape the crisis. This abnormality What is the cause of the phenomenon?

1. The price of raw materials soared
This year is the craziest year for raw materials soaring. According to public information, the prices of various raw materials and bulk commodities have soared since last year.
For example, the price of aluminum has risen from last year's lowest price of 11,000 yuan/ton to about 18,000 yuan/ton.
The current quotation of battery-grade lithium carbonate is around 88,000 yuan-92,000 yuan/ton, a 71.2% increase from the beginning of the year, and nearly double the price compared to last year's lowest point of 48,000 yuan/ton.
As an important raw material for industrial products, the price of Lun Copper has risen from US$6,000/ton to more than US$9,000/ton in less than a year, and Shanghai Copper has also risen from more than 40,000 yuan/ton to nearly 70,000 yuan/ton.
In addition, aluminum, steel, petroleum, chips, coatings, plates, rubber...almost all raw materials in the industry are on the rise.
The skyrocketing upstream materials has caused downstream production and processing companies to dare not accept orders and can only be in a state of semi-stasis. At the same time, after the skyrocketing price of raw materials, market demand has shrunk due to the increase in costs, causing downstream customers to dare not place orders and can only wait and see or reduce the number of orders.
For example, the prices of raw materials required for air conditioning, such as copper and aluminum, are rising sharply. Once the production cost of air conditioners is pushed up and the profit margin is greatly reduced, or the production company is unprofitable, and the retail end cannot achieve a year-on-year increase, it is inevitable that some small manufacturers will face the crisis of bankruptcy.

2. The capital chain is broken
Once the price of upstream raw materials rises, small and medium-sized enterprises will need to spend more money to purchase raw materials. Among these enterprises, some of their own funds are relatively sufficient, but more enterprises used to rely on borrowing to maintain their operations. This has caused some companies to have insufficient liquidity when the cost of raw materials is too high.
At the same time, the lack of creditworthiness of small and medium-sized enterprises makes it difficult to borrow from banks, which eventually triggered a wave of bankruptcy of some enterprises.

3. Slow sales
All along, most SMEs have won the market by virtue of their price advantages. However, after the price hike came, small and medium-sized enterprises had to follow the skyrocketing price of raw materials to increase their prices substantially.
According to online news, at present, the cumulative price increase of many small and medium-sized enterprises has reached nearly 50%, but the price increase of some large enterprises and foreign brands still remains at about 20%.
In other words, the skyrocketing of raw materials has narrowed the gap between the prices of low-end products and the prices of mid- and high-end products. And this change has caused more and more consumers to choose products without price advantage, they will choose to abandon low-end products and buy mid-to-high-end products.
At the same time, coupled with a series of factors such as foreign anti-dumping and blocked exports, the situation of small and medium-sized enterprises' products losing their competitive advantage after the skyrocketing price of raw materials will become more and more obvious.
At present, these major crises have threatened the survival of small and medium-sized enterprises. Will the emergence of corporate failures spread further? It depends on how the management of each small and medium-sized enterprise can get out of the predicament in a correct way that suits its own enterprise.