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Why does the price of lubricating grease keep going up?

Issuing time:2021-10-17 20:38Author:JUNTAI grease

Why does the price of lubricating grease keep going up.jpg

The base oil for producing lubricating grease is rising every day, and the price of raw materials for producing lubricating grease is now rising even more ridiculously! From the previous sporadic price increases, to the present big leap-forward stepped increase. Many manufacturers can no longer quote the ex-factory price.

October 16, 2021: The price of a certain white oil base oil is raised by 700 yuan per ton. It is reported that the base oil is mainly used in the production of lithium complex grease and other products in the grease industry. That is, "HP Grease" and "High Temperature Grease" commonly known in the industry.

From the previous price per month, to the current price per day. There is no need to ask about tomorrow, because tomorrow you will find that today is the lowest price! Because of production and electricity restrictions, raw materials have skyrocketed.... Note that the prices of many inconspicuous products are now skyrocketing.

In the current situation of rising prices for raw materials, please appreciate the prices quoted.jpg

At present, the transaction price of high temperature grease is based on the price when the full payment is received. This means that the price is approved at the exact time when the full payment arrives in the account. If the contract is signed late, then the latest price must be implemented. For lubricating grease products, if you compare the latest factory quotations of the day with the market sales prices in the hands of dealers, distributors, and wholesalers, it is possible that the dealer’s price on that day may even be lower than the manufacturer’s price on that day! That is it so crazy.

The current market for high-speed and high-temperature grease is that the wholesale price and the retail price are reversed. The wholesale price is higher than the retail price. In layman's terms, the price is higher than the sold price. If the dealer gets the goods and starts to sell, the price on that day, it is very likely that the dealer’s market sales price will be lower than the manufacturer’s ex-factory price on that day!

In the previous years when market prices were relatively stable, this situation is unlikely to occur. How much does the distributor take for the goods from the manufacturer, plus the transportation fee, warehousing labor costs, and the meager profit from the volume, the price must be a little higher than the factory price, because there are various operating costs, or the business can’t go Do it down. However, under today’s rising trend, the downstream market sales are not booming, and the demand is not large. As a result, the goods in the hands of dealers may still be in stock, and the dealer’s selling price may be cheaper than today’s manufacturer’s latest ex-factory price.

Raw materials go up, prices go up.jpg

Facing the crazy price hikes that began in October 2021, the oil distributors said:

It has become the norm to quote industrial grease once or several times a day. For so many years, this period of time is quite special. Many people always think that the price increase will make more money, unless you buy more goods before the price increase. Normally, the higher the price, the less you dare to buy the goods, and the risk of futures is high. Sometimes it offends customers, thinking that the supply price is getting higher and higher, but the source is actually rising even more. Generally speaking: when the price increases, normal sellers will try to maintain the original price or increase slightly, increase the purchase volume or other methods to try to obtain preferential purchase prices and squeeze profits to maintain good customer relationships. This year I feel that all walks of life are more difficult.

The recent market is too capricious, and price increases are unpredictable.

So don't ask me, I don't know what the price will be tomorrow.

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