Industrial loft rod prices are up sharply in China as producers look for cheaper options, as China cracks down on cheap imports and factories continue to struggle.
A new report from the China Manufacturing Engineering Association (CMEA) said the industry is currently selling the same amount of industrial loft rods for $1.75 each at an average cost of $2,000.
“We’ve seen the cost of a 10-kilogram (20-pound) loft rod go up by 10 to 20 percent in the past three years,” CMEA’s director of research, David Luszczysz, told Reuters.
“The biggest price increase was on the rod that was manufactured by the same company, and it increased by 100 percent.
It was really the rod used for the construction of the factory.”
The new CMEW study showed that the price of industrial rods is on track to rise another 100 percent by the end of the year, and could go as high as $2.5 million per kilogram.
“Industrial loft rods are a very important part of the industrial product in China,” Luszek said.
“This is a trend that has been going on for quite some time, and we expect it to continue for the next five years.”
Luszek added that the industry has faced increasing competition from cheaper Chinese imports, and is also facing the need to keep costs down.
“The current trend in the industry will be an increase in the cost to build a factory, and this will lead to higher prices for the consumer,” he said.
The CMEAA study showed a total of 6,200 industrial loft rod factories were operating in China last year, but that the number is likely to grow to 9,200 factories by 2021.
Luszzek said it’s not clear how high the price for industrial loft will go.
“In the end, I don’t know,” he told Reuters, “but I think it will be higher than it is today.”(This story corrects the number of factories in China to 9 from 5, to correct a typo in the headline.
Also, CMEU said the price increase in 2016 was the largest in more than a decade, not just in China.)