What’s the Crisis in China
Logistical problems, rising raw material costs, lack of semiconductors, and energy crisis .in fact,the combination of the logistical crisis and the Chinese energy crisis, in addition to the lack of semiconductors, has drastically affected the global trade in musical instruments, causing instability in the supply of products and seriously compromising price stability.
China is going through the biggest energy crisis of the decade.
The price of electricity has more than doubled this year in China, amid the growing demand for electricity from factories. Worse things : production in the country’s coal mines is slower than expected.
The Chinese government has told large energy consumers to reduce consumption during the day and for factories to alternate production stoppages in industrial centers in northeastern China.
Twenty of China’s 31 provinces are now rationing electricity, impacting the production of aluminum, steel, musical instruments. In some regions, factories are only working three days a week.
As much as Chinese investment in alternative energy sources, China still maintains 56% of its energy dependence on coal.
Coal prices have soared as the nation struggles to meet growing demands in heavy industry, real estate, and infrastructure construction to spur economic growth and COVID-19’s recovery.
Meanwhile, droughts in southwest China have further reduced hydropower production, leading to greater reliance on coal.
rising raw material costs
Since the beginning of this year, bulk commodity prices have surged due to factors including the overseas spreading of COVID-19 and the imbalances of supply and demand.
The container shipping from China to the United States is very expensive in the Year 2021 because the shipping demand increases, the tight available space on the vessels (ships), and the low quantity of shipping containers for exports.
You’ve probably heard something in these terms: the lack of semiconductors, but in the end, what does this have to do with the audio, instrument industry? Everything!
From an amplifier, a guitar tuner, a mixer to pedalboards, they use semiconductors.
The problem with this industry has been affecting large audio corporations. and the reason was the forecast of consumer electronics growing price.
What to do?
invest in stock
Considering the situation, the best investment is in stocking new and used products. Not only because of the uncertainty about the availability of the merchandise but also because of price variations.
Increase the number of suppliers
Avoid relying on a few unless you have an excellent relationship and long-term buying schedule.
don’t burn price
The instability of market prices will not help those with low cash. Consider that we are in the middle of the ‘chair game’. The music is stopping time and time and will always have someone out of the game .
Will the world end? No. But forecasts by international experts indicate a tense situation until June 2022, when shipments made after the Chinese New Year arrive here. In the meantime, it remains for all of us to reinvent ourselves and move forward.
And don’t let your guard down: get ready for 2022.