The price of LED high bay light always changing
Recently, the price of LED high bay light has been stable for two years and the trend of small increase is over, the first price reduction in two years. It is understood that the mainstream lamps of TEK all have different range of adjustment, individual varieties decline even up to 20%.
The main reason for the price reduction is, of course, that the external environment of the supply of LED high bay lights for more than a year has changed. For the manufacturer, the two-year sales price is not moving, the cost is relatively low, and also has the internal conditions of the price reduction. For the downstream LED manufacturer, the cost pressure brought by the two-year price reduction has also been alleviated.
Price is undoubtedly an LED high bay light supply and demand from the demand to supply the important characterization, however is this price cut will evolve into LED high bay light industry to start a new round of bargain the competition start?
Excessive reading of the price reduction will undoubtedly lead to the wrong judgment of the future price trend. Knowing the logic behind the price reduction can better judge the future industry price trend. There are three main reasons for TEK's analysis of the price reduction:
1,The relationship of supply and demand from the supply is not adequate to the demand diverted to oversupply, and then formed external conditions for the price reduction of LED high bay lights .
2,LED high bay light price has an inherent trend of price reduction, and LED's semiconductor industry attribute supports regular price reduction.
3,Big LED high bay light manufacturers profit maximization business objectives lead to price reduction.
The great price of 2015 to the Chinese market LED high bay light market price level internal production cost is much lower than the international manufacturers, prompted after 2016 was gradually began to negotiate LED high bay light OEM business into the acceleration phase. At the same time, the local factories received a large number of OEM orders from international brands.
At the same time, the price drop in 2015 also reduced the order quantity to the freezing point, so that in 16 years, despite the storage capacity of big LED manufacturers was still insufficient to meet the incremental demand. The original market growth of OEM orders has LED to the total demand of LED high bay lights to be expected to grow by 20% to 40% per year.
However, from the growth of supply, if by the end of 2017, there will be a 65% increase relative to the end of 2016. Therefore, by the end of 2017, there has been a fundamental change in the pattern of supply and demand tension, and the price of LED high bay light has not been equipped with the external conditions of continuous rise.
In fact, the balance of supply and demand may be even earlier, and the market supply and demand in the third quarter has been restored to equilibrium, only the manufacturers' price reduction response has a certain lag.
LED high bay light at the current stage of industrial development, although the absolute scale of investment in fixed assets than an order of magnitude smaller semiconductor and panel industry, however, still has the characteristics of high fixed costs low marginal costs. In the long run, the cost curve is continuously downward, and there is no constraint on the scale of the traditional industry.
From the history of LED price trend, there is a certain price reduction every year. Manufacturers through the expansion of production scale of internal economies of scale and industrial clustering to obtain external economies of scale, plus material and the process of continuous improvement is enough to reduce costs, expand scale, maintain revenue growth and profit level is relatively stable.
The main reason for the price reduction is, of course, that the external environment of the supply of LED high bay lights for more than a year has changed. For the manufacturer, the two-year sales price is not moving, the cost is relatively low, and also has the internal conditions of the price reduction. For the downstream LED manufacturer, the cost pressure brought by the two-year price reduction has also been alleviated.
Price is undoubtedly an LED high bay light supply and demand from the demand to supply the important characterization, however is this price cut will evolve into LED high bay light industry to start a new round of bargain the competition start?
Excessive reading of the price reduction will undoubtedly lead to the wrong judgment of the future price trend. Knowing the logic behind the price reduction can better judge the future industry price trend. There are three main reasons for TEK's analysis of the price reduction:
1,The relationship of supply and demand from the supply is not adequate to the demand diverted to oversupply, and then formed external conditions for the price reduction of LED high bay lights .
2,LED high bay light price has an inherent trend of price reduction, and LED's semiconductor industry attribute supports regular price reduction.
3,Big LED high bay light manufacturers profit maximization business objectives lead to price reduction.
The great price of 2015 to the Chinese market LED high bay light market price level internal production cost is much lower than the international manufacturers, prompted after 2016 was gradually began to negotiate LED high bay light OEM business into the acceleration phase. At the same time, the local factories received a large number of OEM orders from international brands.
At the same time, the price drop in 2015 also reduced the order quantity to the freezing point, so that in 16 years, despite the storage capacity of big LED manufacturers was still insufficient to meet the incremental demand. The original market growth of OEM orders has LED to the total demand of LED high bay lights to be expected to grow by 20% to 40% per year.
However, from the growth of supply, if by the end of 2017, there will be a 65% increase relative to the end of 2016. Therefore, by the end of 2017, there has been a fundamental change in the pattern of supply and demand tension, and the price of LED high bay light has not been equipped with the external conditions of continuous rise.
In fact, the balance of supply and demand may be even earlier, and the market supply and demand in the third quarter has been restored to equilibrium, only the manufacturers' price reduction response has a certain lag.
LED high bay light at the current stage of industrial development, although the absolute scale of investment in fixed assets than an order of magnitude smaller semiconductor and panel industry, however, still has the characteristics of high fixed costs low marginal costs. In the long run, the cost curve is continuously downward, and there is no constraint on the scale of the traditional industry.
From the history of LED price trend, there is a certain price reduction every year. Manufacturers through the expansion of production scale of internal economies of scale and industrial clustering to obtain external economies of scale, plus material and the process of continuous improvement is enough to reduce costs, expand scale, maintain revenue growth and profit level is relatively stable.
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