With the inflation going on and the CPI over 5.1 per cent in 2010, huge raw material price hikes threaten to derail the China Furniture industry, says manufacturing assocation.
“The raw material price developments in the last twelve months are now drastically squeezing the Chinese producers’ margins,” said Steven, president of the China manufacturers association (CMA).
In the last year, leather have risen by 23 per cent and the price of Stainless Steel has increased by 25 per cent,Pu Foam 28 per cent.Woolen fabric increased by 20 per cent.
Higher still, the Cotton, Solid ash wood, Plastic assessories for Furniture, have risen by 200 and 300 per cent respectively.CMA said.
Knock on effect
As a result of these price increases, the leather , foam, wood and cardboard producers have all raised their prices, piling more pressure on the China Furniture industry,especially for the modern classic designer furniture line,which lay on the export too much..
Further problems have arisen, as customers are requesting longer payment terms from the furniture producers, and the desire for short term orders with smaller lot sizes is demanding enormous flexibility from tube producers.What`s more,the most important,the higher prices of furniture from China will less the profits of foreign importers/distributors.The result is distributers/importers will reduce or shift the importation of furniture or give up the furniture busiess. Under this situation,the returning orders will come slowly.The whole furniture business chain will fall into a mass.
Stven,the President of CMA,predicated that after the Chinese New Year,all the export factories of Furniture will raise the prices of products to maintain the chance of surviving. Especially the items that need huge leather,foam,wood and cotton---like Hans J. Wegner Papa Bear Chair, Finn Juhl Chieftains Chair, Finn Juhl Pelikan Chair/Pelican chair,Finn Juhl Model 45 Chair,Knoll Sofas,LC2,Barcelona Chair,Barcelona daybed, Josef Hoffmann Kubus Armchair, Noguchi Coffee Table, Le Corbusier Grand Comfort Soft/LC3, Le Corbusier Petit Corner Sectional LC2 by Le Corbusier,Eames Lounge chair and ottoman, Hans J.Wegner Wegner OX Chair,Wishbone Y chair, Egg chair,Swan chair and some other designer furniture/Classic furniture.
