Choosing the Right Glow: Differentiating LED Commercial and Decorative Lighting

Industry giants raise prices urgently, price increase anouncement can be seen  everywhere, raw materials will meet the biggest shortage in ten years!


Industry giants have successively issued notices of price increases. What are the beneficiary stocks in the lighting industry?


The price hike has spread to the lighting industry. In foreign markets, companies such as Cooper Lighting Solutions, Maxlite, TCP, Signify, Acuity, QSSI, Hubbell and GE Current have announced price increases.


The number of companies in the domestic lighting-related industries that have announced price increases is also increasing. At present, the world's leading lighting brand Signify has also begun to adjust the prices of products on the Chinese market.


Raw material prices rise, lighting enterprises start price hikes


On 26th Feb, Signify (China) Investment Co., Ltd. issued a 2021 Philips brand product price adjustment notice to regional offices, channel distributions and end users, raising the prices of some products by 5%-17%. The notice stated that as the global new crown epidemic continues to spread, all major commodities in circulation are facing price increases and supply pressures.


As an important production and living material, the cost of lighting products has also been greatly affected. The imbalance of supply and demand and other reasons have caused the price increase of various raw materials such as polycarbonate and alloy which involved in the production of lighting products, and the general increase in international transportation costs. The superposition of these multiple factors has big influence on the cost of lighting.


For raw materials, the prices of copper, aluminum, zinc, paper, and alloys have risen significantly, bringing a lot of pressure on lighting companies. After CNY holiday,the price of copper continued to rise, and reached the highest level in history set in 2011. According to statistics, from mid-last year to February this year, copper prices rose by at least 38%. Goldman Sachs predicts that the copper market will experience its biggest supply shortage in 10 years. Goldman Sachs raised its copper target price to $10,500 per ton in 12 months. This number will be the highest level in history. On 3rd March, the domestic copper price dropped to 66676.67 yuan/ton.


It is worth to notice that the "price increase wave" after the Spring Festival in 2021 is not the same as in previous years. On one hand, the current wave of price increases is not a single raw material price increase, but a full-line material price increase, which affects more industries and has a wider range of influence. On the other hand, the price increase of various raw materials this time is relatively large, which is more difficult to "digest" compared with the price increase of the past few years, and has a more profound impact on the industry.


Post time: Jul-11-2023