I.Force majeure storm
The smoke from the Middle East is spreading along the oil pipeline to every lipstick and every bottle of cream.
The sudden escalation of the US-Iran conflict, like a deep-water bomb thrown into the global energy market, caused international oil prices to stage the most violent “roller coaster” market in nearly 40 years within 48 hours: WTI crude oil futures once soared by 31% to approach 120 US dollars per barrel, and then fell back in a single-day volatility of more than 40%, but they are still firmly nailed to historical highs.
This shock has been transmitted along the petrochemical industry chain. From ethylene and propylene to palm oil, the prices of core raw materials have skyrocketed across the board, and the prices of at least 68 chemical products have risen in response. Among them, more than a dozen commodities such as pure benzene and acrylic acid have increased by more than 50% on the 7th, and some even exceeded 80%.Global chemical giants have lowered operating rates and issued force majeure declarations. Companies such as Basf and Wanhua Chemical have raised product prices one after another, with increases of up to 20%-this energy crisis has finally hit the heart of the supply chain of the cosmetics industry.
As the downstream of the chemical industry, cosmetic raw materials are deeply bound to basic energy sources such as petroleum and palm oil, and the cost of almost all core raw materials is dancing with the price of crude oil.
II.Hubei Mingya's price adjustment and commitment
In the face of this cost storm sweeping the entire industry, Hubei Mingya New Material Technology Co., Ltd. has always stood with its distributor partners and made prudent and firm adjustments under the premise of ensuring stable supply.
1. Price adjustment notice
Due to force majeure factors such as the US-Iran conflict, crude oil and palm oil related raw materials have skyrocketed. Our company has made the following adjustments to the quotation of related products.：
·New prices will be implemented for downstream products related to ethylene, propylene, and palm oil
·Delivery is guaranteed at the original price of the contract for which the deposit has been paid
This is not a simple cost transfer, but under extreme market fluctuations, we adhere to the principle of “ensuring supply and keeping contracts”: for partners who have paid the deposit, we still promise to perform the contract at the original price to minimize the business risks of our partners.For new orders, we will negotiate the best price plan with each customer in a flexible manner, and try our best to balance cost pressure and market stability.
2. Floating of core raw materials
In this wave of price increases, different categories of raw materials have shown different fluctuating characteristics: basic oils and solvents are most directly affected by the prices of petroleum derivatives, and some raw materials have increased by more than 15%, which has become the core driving force to promote the price increase of finished products.The emulsification and thickening system has skyrocketed due to the upstream acrylic raw materials, and the price has risen simultaneously, which will affect the formulation cost of creams and care products.Although the active and protective ingredients are slightly affected, they are also facing continuous cost pressure due to the increase in packaging and logistics costs.
We know that every raw material is related to the formula stability and market pricing of downstream brands. Therefore, in the process of price adjustment, we always give priority to ensuring the supply of core emulsifying systems such as
Emulsifier makeup to avoid brand production stagnation due to the lack of supply of raw materials.
III.Stock recommendation
At present, raw material prices are still fluctuating and rising, and geopolitical uncertainty is still exacerbating supply chain risks.Here, we put forward three suggestions to all dealer partners：
1. Plan ahead for stock
For cationic conditioners such as
Behentrimonium chloride, it is recommended that customers plan their purchases in advance and lock in existing price stocks.Especially the core raw materials for shampoo and hair care products, the current market supply has shown signs of tightening, and stocking in advance can effectively avoid the risk of subsequent price increases and supply outages.
2. Optimize formula structure
For products with high cost pressure, consider optimizing the combination of raw materials in the formula to moderately reduce the cost pressure without affecting the skin feeling and efficacy of the product.
3. Strengthen supply and demand communication
In view of the severe fluctuations in market prices, our company will formulate personalized price plans for different customers and different order volumes.At the same time, the raw material market dynamics and price trends will be synchronized for the first time, so that partners can predict market changes in advance and make more accurate business decisions.
IV.Long-termism: certainty
This supply chain shock caused by the US-Iran conflict is essentially a comprehensive test of the resilience of the beauty industry.In the short term, rising costs will inevitably put pressure on brands and distributors, but in the long run, this will also become an opportunity to promote the upgrading of the industry.
On the one hand, the process of domestic raw materials will be further accelerated, and with stable supply and more competitive prices, greater market advantages will be gained.On the other hand, companies will also pay more attention to the diversified layout of the supply chain, and reduce the risks caused by geopolitical and energy price fluctuations through multi-regional procurement and multi-raw material options.
Mingya has always believed that true competitiveness stems from the ability to create certainty for customers in uncertainty.We will continue to deepen our technology and optimize our supply chain. Under the premise of ensuring the quality and stability of raw materials, we will work with all distributor partners to fight risks and seek common development, and hand over a trustworthy answer sheet in this industry examination.
V.Conclusion
The smoke of the US-Iran conflict has not yet dissipated, the volatility of crude oil prices continues, and the supply chain challenges in the cosmetics industry are far from over.But we always firmly believe that every crisis is an opportunity for growth, and every shock will make the industry stronger.
In this industry shock, we have always paid attention to the stable supply of basic raw materials such as Oil in water or
Water in oil emulsifier to ensure that the production rhythm of downstream brands is not unduly disturbed.
We will always adhere to the original intention of “quality first, customer first”, protect contracts in price fluctuations, protect supply in supply chain fluctuations, and work with all partners to find certainty in uncertainty, and jointly promote China's beauty industry to move in a more stable, efficient and sustainable direction.
Hubei Mingya New Material Technology Co., Ltd.
