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Perspective: How long will the IMM price hike last for?
Source:Adsale Plastics Network     Editor:Ivy Zhang    Date:12.Jan.2021

Since the beginning of this year, the price of injection molding machines has increased. An insider of a Chinese injection molding machine manufacturer told Adsale Plastics Network, his company even has to reject low-priced orders.


“Many manufacturers are working overtime to increase production capacity, but are still unable to meet the high demand. Currently, it takes about two months for general models to be delivered. For some models, it takes three months - from the payment of the deposit - to be delivered,” he said.


Machine manufacturers to increase production capacity


In order to meet these rapidly increasing demands, injection molding machine manufacturers are investing in equipment. For example, Haitian International announced that its subsidiary Haitian Plastic Machinery has entered into a machine and equipment purchase agreement with Ningbo Haitian Precision Machinery to buy automatic processing lines, CNC units, processing centers and related equipment for RMB 177 million.

Meanwhile, the board of directors of Haitian International stated in a recent announcement that the group expects the demand for injection molding machines to grow steadily from 2021 to 2023. With the increase in sales of injection molding machines in overseas markets such as Turkey, Vietnam and the Philippines, the group’s current production capacity will be insufficient to meet the demand. Therefore, several new production sites will be established in China and abroad between 2021 and 2023.


The demand for injection molding machine is expected to grow steadily.


Steel price on the rise


“I think an appropriate price increase is a normal phenomenon due to the price increase in steel materials, changes in market supply and demand, and not enough components reserves,” commented Su Dongping, the Executive Vice President of the China Plastics Machinery Industry Association.


Injection molding machine industry is an industry of capital, technology and talent, with the cost of steel materials accounts for one third of the total cost of an injection molding machine, she remarked.

According to data from the China Iron and Steel Association, China's steel price index rose to 113.06 at the end of November 2020, representing an increase of 5.3% month-on-month and 4.5% year-on-year respectively.


“Apart from the price increase in steel materials and the shortage in components supply, the wages, social security, and tax costs have been increasing. That is why the price of injection molding machines has been increasing accordingly,” continued Su Dongping.

Su Dongping_web.jpg

Su Dongping, the Executive Vice President of the China Plastics Machinery Industry Association.


An operation analysis of plastic machinery enterprises above designated size from January to October 2020, issued by China Plastics Machinery Industry Association, showed that the operating cost of the enterprises was RMB 47.154 billion, representing a year-on-year increase of 15%, while production output was 258,595 units, a decrease of 14% year-on-year. The turnover was RMB 62.279 billion, up 19% when compared with the previous year.


“As production output decreased while turnover and cost increased, the data confirmed the trend of price increase in injection molding machines,” Su Dongping explained.


Expected to be alleviated after June


Su Dongping also pointed out that the Chinese injection molding machine industry has been playing an important role on producing epidemic prevention products like face masks, food and medical packaging, etc. In particular, as the pandemic has been under control in the country, production was resumed and orders from other countries have been shifted to China.


“Most Chinese injection molding machines manufacturers have order intakes scheduled till June,” she noted.


Nevertheless, Su Dongping believes that the current production capacity of leading injection molding machine manufacturers has not yet reached the limit, and the manufacturers have the ability and technology to further expand their production capacity


Therefore, the imbalanced supply and demand situation is expected to be alleviated after June this year, she concluded.



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