At present, due to various reasons, our export quotation for lamps can only be maintained for two weeks. Why does this happen? The main reasons are as follows:

1、Electricity Limit：

At present, domestic power generation mainly relies on power plants to generate electricity through coal. However, a decline in coal production will lead to an increase in coal prices, which in turn will lead to an increase in power generation costs. Due to the epidemic, many foreign orders have entered the country, and the production lines are all operated by electricity, so the cost of power generation has increased, and the country can only take measures to restrict electricity. At this time, there will be a large number of orders piled up. If you want to produce smoothly, you need to increase labor costs, so product prices will inevitably need to rise.

2、Shipping Cost

In recent months, the rapid increase in freight rates has directly led to an increase in overall quotations. So why does the freight price increase so fast? Mainly manifested in the following aspects:

First, since the outbreak of the epidemic, major shipping companies have suspended routes one after another, reduced the number of voyages for export containers, and significantly dismantled idle container ships. This has caused a shortage of container supply, insufficient existing equipment, and a serious decline in transportation capacity. The entire freight market has subsequently “supply exceeded demand”, so shipping companies have increased their prices, and the rate of price increases is getting higher and higher.

Second, the outbreak of the epidemic has led to a high concentration and growth of domestic orders, and a significant increase in the proportion of domestic exports of materials. The large number of domestic orders has led to a shortage of shipping space, resulting in a continuous increase in ocean freight.

3、Rising Aluminum Prices

Many of our lamps are made of aluminum. A rise in aluminum prices will inevitably lead to an increase in quotations. The main reasons for the increase in aluminum prices are:

First, under the goal of carbon neutrality, relevant policies have been introduced, such as limiting the production capacity of electrolytic aluminum. The supply of electrolytic aluminum is restricted, the production capacity is reduced, and the inventory is reduced, but the order volume is increasing, so the cost of aluminum will rise.

Second, because the price of steel has skyrocketed before, aluminum and steel have a complementary relationship in some cases. Therefore, when the price of steel rises too much, people will think of replacing it with aluminum. There is a shortage of supply, which in turn leads to an increase in the price of aluminum.