How is the market circumstance going in 2021?

As you may know, the market circumstance these days is not so good. Almost all the materials’ costs in China keep increasing crazy. Take aluminum as example, the price has increased more than 50% since May 2020.

Why? – Coronavirus (COVID-19)

In order to prevent the liquidity crisis caused by the new coronavirus, many countries have to print money on a large scale to release liquidity and avoid the emergence of economic crises. This is the root cause of the skyrocketing prices of various materials. 

How? - There will be no strong fall back in the short term.

I. Before the epidemic is over, no turnaround can be seen.

II.After the epidemic is over, it will still be bad for a long time.

When the epidemic is over, the manufacturing capacity in Europe, the United States and the world will recover, which will intensify the shortage of raw materials. The relationship between supply and demand will continue to be unbalanced.

During the epidemic, a large number of factories are under-operated and foreign trade in European and American countries are in a mess. They are in a lockdown state or a half-lockdown state, which means the production outputs may be insufficient, and the required raw materials may also be insufficient.

However, when the epidemic is over, the factories in these countries will recover. They will need more raw materials. At this time, the relationship between supply and demand will be unbalanced again. When everyone needs raw materials, raw materials become even scarcer. 

Therefore, regardless of whether it is during or after the epidemic, it is difficult to alleviate this situation of rising raw materials in the short term. There may be fluctuations, but the overall trend is still going up.