Further adjustments are expected as makers cover higher production outlay and exchange risk.
Projections point to quotes of China-made sockets and switches staying on an upward track in coming months. Increases in production outlay continue to put pressure on margins, which is less than 10 percent at most companies.
|Fuzhou Elegance offers the model EE-EL wall socket and switch in various colors.|
PC, for instance, climbed 15 percent to more than $3,100 per ton in April from $2,700 in December last year. Spending on the same amount of PP, meanwhile, rose 18 percent to exceed $1,600.
Copper for the wiring surged 20 percent. Rates for the metal reached $10,800 per ton in April.
Besides soaring raw material costs, the appreciation of the yuan against the US dollar is causing concern. In May, the exchange rate broke 6.50 yuan to the dollar from 6.70 in December 2010.
Amid these developments, most makers hope to keep price increases in the months ahead within 5 percent to ensure competitiveness. Suppliers are generally reluctant to adjust quotes further after implementing markups of about 5 percent earlier this year.
To minimize losses, some companies are studying the possibility of pricing in yuan exports to Southeast Asia and certain buyers in the Middle East and the US. A number are reducing price validity periods from three months to 30 days to react more quickly to fluctuation in costs or the exchange rate.
|The model W11-A120Y wall switch from Ningbo Wuyun has an IP44 rating.|
Most sockets and switches from China are made of plastic. In the latter, wood, glass and metal options are also available.
For sockets, the selection comprises designs for various types of plugs, including US and Europe types. Priced between $0.45 and $10, most are rated at 110 to 250V and 10 to 16A.
Models not exceeding $1 consist only of a single socket with a plate made of ABS. At the higher end of the price range, the selection includes PP and PC designs with multiple sockets and switch-and-socket combinations.
Most China-made switches have white rectangular faceplates made of plastic. The least expensive models come in ABS, while PC is often used in midrange and high-end units.
White is the prevalent color. A number of designs, however, are offered in other hues.
Prices of push-button types start at $0.55. Models in this category are typically rated at 230 to 250V and 10, 13, 15 or 16A.
Versions with timer settings reach $18. Voice-activated units exceed $8.
Products can be configured to control one or more lamps. Those compatible with incandescent luminaires go for $0.35 to $6, while designs for LED light fixtures are between $5.50 and $16.
Mainland China hosts about 1,000 suppliers of sockets and switches. The majority of the industry consists of locally owned enterprises, with only 10 percent made up of SOEs and those with investors from Hong Kong, Taiwan or farther.
Most companies operate on a small or medium scale. Those belonging to the first group produce fewer than 150,000 units each month and generate less than $1 million in sales each year. Their factories are no bigger than 1,000sqm.
Such small operations have fewer than 100 employees. Of the workforce, only two are assigned to QC and another two take charge of product development.
With monthly output ranging from 150,000 to 5 million units, midsize makers post up to $10 million in annual revenue. These enterprises have factories between 1,000 and 10,000sqm in size, which often comprise mold-making facilities. The workers at their plants reach 600 in number and include two- to 10-member groups for R&D and QC.
Accounting for 10 percent of the supplier base, companies with larger factories and workforce can produce more than 10 million units monthly. Their yearly revenue exceeds $10 million.
Regardless of size, most companies are engaged in mixed production. Other than sockets and switches, their selections often include power cords, circuit breakers, lamp holders and cables.
Guangdong, Fujian and Zhejiang provinces are the key manufacturing centers for the two lines, accounting for more than 60 percent of output. Suppliers in the three areas have access to strong support industries and skilled labor.
Note: This article "Sockets & switches prices to remain on the upswing" was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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