Glass Analysis of price and influencing factors
5.1 Cost composition and price of glass
From the composition of glass cost, it mainly includes fuel, soda ash, silica sand, etc. The cost of the above three materials accounts for about 70% of the total cost. Other raw materials and labor costs are not the main factors affecting the production cost.
According to the statistics of China Building Materials Information Network, the glass production cost (excluding tax) of key national contact enterprises has been rising slowly from 2002 to 2010, from the initial 30 yuan/weight box to the highest value in 2008, approaching 70 yuan/weight box (at that time, the international crude oil price peaked at 147 dollars per barrel), and then there was a rapid decline process, Since 2009, a new round of rising process has begun.
In recent years, with the rise of international oil prices, heavy oil prices remain high. Especially in the first half of 2011, China's dependence on foreign crude oil has exceeded that of the United States, reaching 55.2%, a new high. At present, the oil consumption has exceeded the GDP growth rate, and the energy consumption growth rate is too fast, which brings huge pressure on energy production and energy conservation and emission reduction. According to the estimation of the Ministry of Industry and Information Technology of the People's Republic of China, the apparent consumption of domestic crude oil in 2011 was about 468 million tons, up 6.5% year on year, and the apparent consumption of refined oil was about 267 million tons, up 8.8%.
The high price of fuel has seriously affected the control of glass cost. Natural gas, coke oven gas, petroleum coke and other alternative energy sources have been widely used in the glass industry. However, the share of fuel in the cost of glass is still not declining. The price of soda ash is also an important part of the cost of glass, which has been maintained at a high level.
Taking the float glass cost of Qibin Glass Group in 2010 as an example, the average proportions of soda ash and heavy oil in the production cost were 25.37% and 29.88% respectively.
Cost composition of float glass of Qibin Glass in 2010
5.2 Pricing mode of glass
Since most of the current glass products are circulated in a certain market area, the glass production enterprises in this area basically determine their own product prices based on the product prices of the main competitors in the region and other comprehensive factors. There is also a certain influence relationship between glass prices in various regions, which is not independent.
Price trend of float glass since 2009
From the trend chart of the "national average price of float glass since 2009" in Guangzhou, Shanghai, Beijing, Zhengzhou and other places, it can be seen that the market price in 2009 fluctuated greatly, rising 78.32% from the lowest 63.41 yuan/heavy box on March 10 to 113.07 yuan/heavy box on December 30.
In the daily sales process of glass enterprises, the pricing mode of products is mainly "follow the market" pricing method. The sales radius of glass products is shrinking, and the pricing of enterprises mainly refers to the market demand and the price level of products in the surrounding industry. In terms of specific business, there are still some differences between the products of each enterprise, so there is still a price difference between the products of each enterprise. Generally, there are the following pricing methods:
5.2.1 Price subsidy
Generally, glass enterprises will give agents or distributors a price discount to maintain the profits of glass enterprises at a certain level through price discounts. Its advantage is that it can reduce the impact on the overall market while stabilizing the overall order of the market. This kind of market operation is relatively hidden. Compared with other transparent price promotion strategies, it better protects the manufacturer's marketing strategy. The disadvantage is that the price operation is easy to be used by dealers and intermediate users. Relatively speaking, dealers and intermediate users prefer direct price reduction and other promotional measures.
5.2.2 Hedge sales
The agent of the glass enterprise takes goods from the enterprise. No matter how much the price and quantity of glass products are, the enterprise will ensure a certain profit margin for the agent. Advantages of this policy: the order volume of glass enterprises was enlarged, which solved the problem of substantial production reduction and inventory backlog of enterprises caused by market shortness at that time. However, because agents do not need to bear any risk, orders will expand when the market recovers slightly. Enterprises cannot control output at the source, and the imbalance between supply and demand is serious; On the other hand, under the situation of market decline, although glass enterprises frequently introduce price limiting measures, it is impossible for all traders to restrain themselves. Driven by interests, the price of glass products is constantly pushed lower. After solving the short and medium term difficulties in the production and operation of glass enterprises, the value maintenance sales have laid a new "mine" for the unstable development of the future market.
5.2.3 Month end settlement
According to the change of market price, the settlement shall be based on the average price of each month. A certain amount of deposit shall be paid in the early stage, and the average market price shall be used as the settlement price in the month of delivery. The advantage is that it is more closely connected with the market, the settlement price can reflect the market price in a timely manner, and the agent can adjust the order in a timely manner according to the changes in market conditions and downstream demand. In the period of frequent market fluctuations, this policy helps glass enterprises and agents to share risks. The disadvantage is that the glass production enterprise lacks dominance, and the production plan is subject to obvious fluctuations in the short-term market. Due to different picking times in the market, the settlement time is also different, and the operation space between traders is increased.
5.2.4 Implement CIF policy
This kind of pricing mode is mainly for the glass manufacturer to bear the transportation cost of the product. The invoiced price also includes the transportation cost of the product and various miscellaneous expenses. Its advantage is that dealers and intermediate channels can easily calculate the cost price and CIF price, which is conducive to cost control; The disadvantage is that for areas with long transportation distance, glass production enterprises bear high transportation costs.
5.2.5 Price coordination
Domestic glass enterprises occasionally organize some production enterprises to communicate in the form of "market situation seminar" within their regions. Through the communication and exchange of major glass manufacturers, the downward trend of glass prices can be stabilized to a certain extent, and the healthy development of the industry can be jointly maintained. However, this kind of market situation seminar has no legal basis and legal effect for the participants. Usually, it can only be "icing on the cake" when the market is good, and cannot achieve the purpose of "providing timely help" when the market is depressed.
On the whole, the price competition in the glass market is diversified in many ways. This is mainly due to the fierce competition in the glass market, and the market scope of ordinary glass production enterprises is getting smaller and smaller. In order to better complete the production and operation tasks, manufacturing enterprises often use not only one means of competition and strategies, but also a combination of various means of competition.
5.3 Main factors affecting the price fluctuation of glass
The influencing factors of price changes in the glass industry are not only limited to the development of upstream and downstream industries in the glass industry, but also the impact of the national macro-economy, changes in market consumption psychology, and so on. For example, under the influence of the world financial crisis in 2008, the world economy was greatly impacted, and many products, especially those with large export sales, had a great impact. The glass industry is no exception. Not only has the export sales decreased significantly, but also the export price has fluctuated greatly. In order to boost the economy, the country has launched the "four trillion" economic stimulus plan, and local governments have also introduced positive development plans. Driven by the national economic stimulus policy, the glass industry soon came out of the shadow, demand grew, prices climbed, and market psychology was quite positive.
5.3.1 Market environment factors
Under the condition of socialist market economy, if enterprises want to survive and develop in the increasingly fierce competition, they must make their products have strong market competitiveness and constantly adapt to the changes in the market. Therefore, the market plays a decisive role in the development of enterprises. Only when there is a market for products can an enterprise make profits. If one market is lost, an enterprise will lose some of its benefits. If there is no market for products, it will be difficult for an enterprise to survive. Therefore, the enterprise must establish a market-oriented policy and follow the law of supply and demand. When the supply of goods in the market exceeds the demand, the producers start price competition to sell goods, which causes the price of goods to fall. When the supply exceeds the demand, the buyers will raise the price to obtain goods, so that the price rises. In this cycle, the market is like an invisible "big hand" regulating the price of goods, so that supply and demand reach a balance, and the price eventually tends to balance the price.
5.3.2 Enterprise's own factors
The business activities of commodity circulation enterprises must be based on their own resource endowments. The so-called resources refer to the sum of effective elements controlled or owned by commodity circulation enterprises. The resources of commodity circulation enterprises can be divided into tangible resources and intangible resources according to whether they are easy to identify and evaluate. Tangible resources refer to visible and energetic assets, such as funds, equipment, etc., including financial resources, physical resources, organizational resources, human resources, etc. Intangible resources refer to assets that are rooted in the history of commodity circulation enterprises and accumulated for a long time, and are difficult to identify and quantify, such as enterprises' innovation ability, reputation, trade secrets, etc. The most important is the core competitiveness of enterprises. The core competitiveness of enterprises is the competitiveness formed by integrating and subliming the resources with strategic value in the sustainable competitive advantage of commodity circulation enterprises, including human resources, technology system, management system, information system, enterprise values, etc.
5.3.3 Cost factors
Cost, also known as production cost, is the monetary expenditure of various production factors purchased by enterprises in the production process, that is, the material cost and labor cost paid by enterprises in the production and operation process. The cost of goods is one of the main factors that determine the price of goods. It generally includes production costs, sales costs, storage costs, labor costs, etc. Enterprises generally increase production to reduce commodity costs, thereby reducing commodity prices. The rising cost price will also prevent enterprises from lowering the sales price of products.
5.3.4 National policy factors
Including relevant policies, laws and regulations, such as tax law, monetary policy, fiscal policy, interest rate policy, exchange rate policy, etc. For example, the state implements a loose monetary policy at a certain stage, increasing the supply of money, leading to inflation and rising commodity prices; Implement active fiscal policies, reduce taxes, indirectly increase money supply, and cause price rise; The state implements a low interest rate policy, encourages consumption, increases market demand, and thus leads to rising commodity prices. On the contrary, the state can reduce the money supply, increase taxes, and implement high interest rate policies, which can cause the price to decline. In addition, the exchange rate policy can also cause the rise and fall of domestic price level to a certain extent.
5.3.5 Psychological factors
The circulation channels and operators have changed their psychological state after being affected by various aspects, which often leads to emotional fluctuations, misjudgments, and blind buying or selling behavior, which is also an important factor that causes the price of glass products to plummet in a certain period of time.
