Announcement 2021 Q1

Valued customers,
The year of 2021 has come with the deep influence from the global public health emergency(COVID-19), which has posed not only a serious threat to the life and health of people in many countries, but also posed a major risk to world economic development.
With the development of science and technology, as well as the improvement of human quality, we have confidence that the epidemic will finally be defeated.But, we should clearly realize that, due to the influence from the epidemic, the world-wide economy should recover in a long run. Also, we should have adequate and sober recognition for production, supplying and transportation, in post-epidemic period.

The prices of raw materials have been dramatically rising since 2020Q4.The prices of acetone and phenol have been doubled since 2020Q3, which pushed up the prices of our products. The soaring prices of other basic raw materials have become the keynote of chemical production. The whole group is suffering much from the rising prices, as most raw materials are purchased from China mainland.
Also, due to the impact of COVID-19 epidemic, international logistics capacity dropped a lot, leading to a sharp rise in sea shipment freight. The port congestion, less arranged containers have aggravated the rising costs in sea shipment market. The air transport of epidemic prevention supplies also pushes the rising cost in air shipments market.It shows that the average shipping cost has hit the top in recent ten years.
The RMB is constantly appreciating since 2nd half of 2020. Supported by the Sino-US interest rate differential and strong demand from foreign investors for Chinese assets, the RMB is expected to be appreciating further in 2021. Thus the Chinese exporters are faced with huge pressure from the appreciation of RMB.

To conclude, increasing production costs, tight supplying, higher shipping costs, exchange rate pressure are still the the key words in (at least) 1st half of 2021  for the chemical industry.

We adheres to the customer service for the purpose, and ensure supply as the first goal. We have tried our best to maximize cost absorption and maintain the quotations, but we would reserve the right to adjust the prices according to the market fluctuation when necessary. Your kind understanding is highly appreciated.

Thank you for your support always,Best regards.

Post time: Mar-31-2021