The Reason Why The Raw Material Of Automobile Connector Rises

What are the reasons for the recent rise in the cost of various raw materials of automotive connectors,wire harness,terminal,seal? Let's take a look. There are three main reasons:

1. Monetary easing and international tensions

The oversupply of US dollars has led to the rising prices of raw materials and other commodities. Under the circumstance of unlimited QE, the price will continue to rise for at least half a year. In general, when the dollar weakens, the market demand for the commodity will increase, which will push up the price of the raw material. When the dollar is expected to depreciate, the market demand for the commodity will increase, which will push up the price of the commodity. The remaining question is how to increase and how much to increase, and the situation is not controlled by a single manufacturer.

Second, international tensions have caused the prices of imported raw materials to soar. Iron ore and other related industrial materials are imported from Australia, for example, and supply prices are now soaring amid a chill in Sino-Australian relations.

2. Supply and demand resonance

In the post-epidemic era, the domestic consumer market has woken up from a sluggish state. Global lifestyles have also changed, with the arrival of the "homebody economy" leading to the continued demand for consumer electronics and the increasing demand for electric vehicles, which have created a passive imbalance between supply and demand. China, as the most important demand country, has the most effective control over the COVID-19 epidemic. Therefore, it is expected that the domestic economic activity will continue to recover in 2021, so the market consumption is still optimistic. In addition, the emphasis on the new energy sector in the country's 14th Five-Year Plan will continue to support the demand for raw materials.

3. Impact of the epidemic

The price rise of bulk metal raw materials for car connector and motorcycle connector is also caused by structural tight supply and shipping due to the pandemic. The pandemic has caused insufficient production capacity in some countries, and production stoppage and limit in a large number of raw material supply regions. Take copper as an example. Since the outbreak of COVID-19, South America, as the main copper supply region in the world, has become the hardest hit area of the epidemic. The depletion of copper inventories has also led to a widening supply gap, which has supported copper prices. In addition, the decline in international logistics capacity has led to a sharp rise in shipping container ships' freight costs and a prolonged supply cycle, leading to a continuous rise in the global price of raw materials.