The aftermath of the earthquake triggered shortage of raw materials

Affected by the Wenchuan Earthquake, Sichuan Yuanyuan Powder Production Enterprises, which account for 30% of the total output of Yuanming Powder in the country, have reduced or stopped production in various degrees, and the transportation of the products has been severely impeded. In addition, some customers have been ordered by the impact of panic, resulting in the market Shortage of supplies. According to industry analysts, the continued tight supply of Yuan Mingfen will continue for some time.
At the beginning of this year, relevant experts predicted that due to the good operating conditions of Yuanmingfen in 2007, many companies have expanded their production in 2008 and the domestic market has become a foregone conclusion. With the successive listing after June, it is expected that it will be listed in September. Demand in the nation's Yuanmingfen powder market will exceed supply. However, the sudden Wenchuan Earthquake caused a sudden change in the Yuanmingfen market, where supply continued to increase.
The earthquake caused various major Yuanmingfen enterprises in Sichuan to stop production in various degrees. Most enterprises stopped production on the day of the earthquake. Later, because of the aftershocks, other companies also stopped because of government requirements or due to factors such as employee safety and coal shortages. It has been estimated that manufacturers in Sichuan have reduced production by more than 100,000 tons due to parking. Although the parking time was not long, most companies resumed production after a few days, and the reduction of 100,000 tons was not too big for the national annual output of 8 million tons, but it also exacerbated the market tension that was in the peak season.
At the same time, due to the earthquake disruption of the 109-way tunnel of the Baocheng Line, the products of the Sichuan Yuanming Powder Company were severely hampered in the east, north, and northeast markets, and shipments were confined to individual markets such as southwest and south China. Especially in the critical period of earthquake relief, stations near Chengdu have basically become relief material distribution centers, and other materials cannot be properly transported out. The products sent by Sichuan Yuanyuan Mingfen through the container to all parts of the country are in a state of stagnation, and all of them are stored in the self-provided yards of various logistics companies. In this way, Chuanwu’s share of the East China market was in short supply, causing some companies to re-find new sources of supply because they were out of stock. In addition, due to earthquakes, some customers have panic, think that Sichuan Yuanming powder company is affected by the earthquake, can not be normal production and shipping, it is expected that product prices will further increase, have called to request delivery, so that the overall market supply in late May , and this tension will continue until June.
According to industry insiders, the three major factors that led to strong market demand are the reduction in production, transportation restrictions, and customer panic in Sichuan enterprises. In addition, after May, the printing and dyeing companies started completely and entered the production season; the company's market for buhuahua also improved significantly. With the increase in the output of these downstream companies, the demand for Yuanmingfen has also increased. The supply of Yuanmingfen was unusually tight and directly caused Yuanmingfen's price to rise. In June, the price of Yuanmingfen was adjusted on the basis of May, and was once again generally raised by RMB 50/t, which was about 15% higher than the price at the beginning of the year. At present, the average price of the national Yuanmingfen powder market has reached the highest level in the past 10 years.

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