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Why can't China lubricating grease maintain the original price regarding the price increase?

On social media, Facebook and Twitter have seen news of oil price increases, which is much more popular than traveling during the National Day! Just a few days after the Chinese National Day, many lubricating grease practitioners felt the greatest emotion. Check the news on my mobile phone. Few people travelled, most of them stick to their posts, and news of the price increase of oils and fats is overwhelming.
How much does China grease increase in the end

Many end-customers returned to work after the National Day holiday, and then asked the upstream oil what the price is now, and they just asked about it. As little as an increase of 500 per ton, as large as an increase of two thousand or three thousand per ton. The rapid increase in the price of raw materials this time is staggering. Let us first take a look at how much, or how many times, the raw materials used to produce lubricating grease have increased over the past year. Just check the professional analysis of other channels by yourself. We only talk about the raw materials that have an immediate impact on the price.

How much is the price increase of grease->base oil?

Take the second-line base oil that is mainly used by domestic small and medium-sized grease manufacturers as an example. Before October 1st, the price of base oil is roughly between 5200-5400 yuan per ton, and after October 1st, the price of base oil is roughly 6080-6100. Between yuan per ton.

Take the third-line base oil that is mainly used by domestic small and medium-sized grease manufacturers as an example. The price is maintained at 5600-5700 yuan per ton before the National Day. After the National Day on October 1, the price rises to 6400 yuan per ton. Take lithium soap grease products such as lithium-based grease, lithium complex grease, extreme pressure lithium complex grease and other lithium soap grease products as examples. The price of lithium hydroxide products that must be added during the production process will be reduced from the low price of 39,000 yuan per ton in early 2021. , Soaring all the way to a transaction price of 170,000 yuan per ton. Realize the price has quadrupled.

At the same time, in terms of grease packaging, the cost of outer packaging of plastic barrels such as 14L, 15L, 16L, 18L, and 20L has risen recently, and the basic price increase is about 0.5 yuan each.

The price of grease has risen sharply, and many dealers will try to apply for the original price to the upstream manufacturers. I can only say about this: maintaining the original price is difficult, difficult, and too difficult. Because this time the price of raw materials has risen too fast, too drastically, and the magnitude is too great. And the most important thing is that many manufacturers' base oil reserves are low in inventory due to the combination of previous price instability and the relative downturn of the market in previous years. In other words, the base oil inventory of many manufacturers is not large. Basically, it is to maintain an inventory status that is in and out.

As for how much base oil prices have risen at that time, manufacturers have no choice. As long as the manufacturer has unfinished orders to produce, he can only make up for the oil and make up the warehouse based on the base oil price in the market on that day. Therefore, to a certain extent, the price of raw materials is basically synchronized with the price of finished grease. The raw materials that have continued to rise this year, to be honest, have successively eaten up the manufacturers' meager profits. Although the prices of raw materials have skyrocketed all the way, and the sales price of grease on the surface is also rising with the tide, the profits of the manufacturers are further shrinking.

Therefore, in the face of the substantial price increase of base oil and raw materials, manufacturers can only cover their positions on demand. The entire grease industry, this time around, may appear to be like this. But in any case, when the price of raw materials rises too sharply, too ridiculously, too quickly, and delays in lowering the price, no matter the manufacturer or the distributor, who wants to maintain the previous original price, there may be no way for anyone to do it.

In 2021, Lubricating grease is very expensive, don't waste it, cherish it!

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