Zhejiang Shangyu Copper
Soup to go in Zhejiang Shangyu Town, you can often hear people discussing a very professional manner as far away as the United Kingdom London Metal Exchange (LME) market conditions, and these “professionals” may probably be some still on the primary and secondary schools children.
Copper on the international market from the end of 2003 to 1.7 yuan / ton to the April 2006 high point 88000 / ton. To the press before the more than 70,000 yuan / ton, per minute or per second Fast Change is like two butterfly wings charm, affecting yunoura this a beautiful, not so closely linked with the outside world a small town.
Tang Town’s copper production accounts for about 12% of the country’s total output, known as the “Jiangnan brass of the town.” This town of less than 16,000 people, there are nearly 150 large and small copper tube production enterprises, mostly married folk and a simple style workshops. Copper prices ended mixed in determining the survival of the population here, tens of thousands of the state. The children here, though do not know why living things, but it has LME, Shanghai Yangtze River, the spot, futures and other specialized terminology easy to sing of.
Go out of business? Transferring?
Jiang cursor 36-year-old, has been fought in the copper processing industry more than 10 years. In 1997, he serve a brass factories declared bankrupt after he began and his wife opened their own two Shangyu dry and copper plants. However, come the end of June at a press interview, the original dry and copper plant has been transformed into days Hao garment factory. “I do not want to engage in copper processing, although still sported three production lines, but maybe give me clothes to bring a better future.”
According to Tang Town, deputy mayor in charge of industry XIA root description copper prices went up, the cursor such as the Chiang Kai-shek companies converting about 20 or so, accounting for Tang Town copper processing enterprises in 10% of the strong. Although the overall point of view, this year’s sales of soup Town of copper may increase 30-40%, but this was mainly due to price rise, the actual output is declining. “And,” XIA root stress Road, “This year, the country’s copper production will be reduced 20-30% or so. Because of the volatility of copper prices, many companies are doing everything possible to use copper to find alternative materials, overall, demand for copper will be is reduced. “June 27, the International Copper Study Group (ICSG) latest monthly report shows that in the first quarter of this year, China’s consumption decreased by 6.4%. This data proved that yunoura town, XIA roots are very professional and put in place to judge.
Jiang cursor from the end of 2003 began to sell their production lines, when copper prices are not so obvious. However, the subsequent surge in copper prices also strengthened his own choice, especially in April 2006: 5 consecutive days, copper prices rose by 4 million, exactly doubled. Initially 46,000 yuan / ton, up more than 2,000 the next day, third day of the 5000 … … in that particular month, loss of hundreds of thousands. “This business is how to do?” Jiang cursor to talk about them still reeling, “worked so hard for so many years, a few days now lost!”
Tang Town of small plants in the most exaggerated copper Change period is used there is no room for maneuver pricing: 11:30 noon on that point in time a day, the spot price as the price of the day’s orders, each 11:30-14:00 noon on the day only in an indirect single and the rest of the time not and will not take. Copper processing profit margins, the normal period of only 3-5% of the profit margin, but This time copper prices by up to 3-5 times, therefore, for all copper processing enterprise, take the lead in confronting the problem has not earned is not to make money, but can not live issue.
“Does not produce, while not making money, but at least it will not be loss!” This is the most direct cause of small and medium enterprises out of business temporarily. “But the real closed, not much,” a copper Yuyao boss told reporters, “even if no production, we must pretend that there is no cut-off appearance, hard support, or even no shadow of the receivables.”
Loss? Make money?
“This year, large and small enterprises are loss!” And Chiang Kai-shek the cursor with the Golden Eagle in the soup Copper Pu Sun Ligang vice president told reporters, “even though they do not say, but the loss is certain.” If that does not make money small business , you can close out of business, but the big companies not, affect the situation as a whole. Once the cut-off, local governments, banks, upstream and downstream will be to come to so many large companies, even loss, or to be done.
A copper processing operations also endorsed Sun Ligang Wang, owner of the view that hit large companies than small businesses even more serious. He gave reporters calculations: 1, raw material price increases 3-4 times, mean that interest on loans increased 3-4 times, there is this simultaneous increase in mortgage costs; 2 increases the amount of raw materials can not be completely passed to the the next, so we must reduce the already very thin margins. For this year’s copper processing enterprises, 2% of the profits have been very optimistic; 3, with many managers of large enterprises will spend several times in the small business labor costs; 4, if the so-called “shortening the construction period” really exists, Then the machine wear and tear, and thus bring electricity, water and other costs are bound to increase; five large enterprises more standardized system of employment, overtime will inevitably bring about overtime costs … … Taken together, the pressure of big business should be far greater than the small businesses.
Hai-liang, chairman of Ping Yali Group, also believes that companies large and small at the moment with copper converting, or go out of business, nor is it a bad thing. “Through hands raw materials inventory, a short period of 1-2 months, they had earned in previous years, a full year to require hard-earned money.” Ping Yali told reporters, “So, I think we all came around the factory owners happy every day grinning. “Ping Yali, and do not feel badly, though,” every day on tenterhooks for fear of accidentally copper prices doubling again, “but she did not like the cursor Sun Ligang and Chiang pessimistic:” Copper We have added up to a lot of pressure, but because the prices are not suddenly rise to high, but today, 2000 tomorrow, 3000, after a year or so to the point where it is today, so companies can have sufficient time to adjust and adapt. “Ping Yali said he remains optimistic about copper processing!
Shuffle? Opportunities?
Shangyu Star-peng copper equity restructuring completed in 2000, the previously separated five copper plant to re-merge, and ultimately establish a local’s largest copper processing enterprise, the founder Liangxi Lin as chairman. The Group’s total assets in 2005 reached 750 million, has established three major copper base employs more than 1,000 people. XIA Kan, vice mayor of Tang Town, said Tang Town is well aware of the large enterprises have a stronger ability to resist risks before we advocate the completion of the merger of satellite-peng. “Only big companies, and in order to have a stronger ability to have a bigger room for maneuver!” The simple but astute deputy mayor of the losing that “prices must be the final result: big business is growing , small businesses increasingly weak. ”
An interview process, a lot of copper prices have said: the price of copper copper processing enterprises to the capacity of its own competitiveness is closely related to, including the size and financial strength of enterprises, the cost passed on to the downstream capacity, and management standards. Hence, they appeared in the price of copper skyrocketing, some businesses cut, and went out of business, while others have developed a number of businesses, and stronger and stronger. In the sea Group bright, star-peng copper appears to their own businesses already have a certain degree of bargaining power and self-regenerative capacity, so even if there was any localized loss will not affect the overall situation. On the contrary, they are to “survive” after the generally optimistic about the future. As Xing-Peng Liang Xilin, chairman of copper said: “The industry has begun to reshuffle! Temporarily view, is suffering. The long run, is an opportunity!”
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