The year 2011 has been a difficult and struggling year for small and micro hardware enterprises, with risks such as "three shortages and two highs", and a wave of closures likely to ruin the enterprise at any time. However, the Development and Reform Commission of the Ministry of Finance jointly issued the "Notice on Exemption from Some Administrative Fees for Small and Micro Enterprises", which will be implemented from 2012. The notice proposes that relevant administrative fees for small and medium-sized enterprises such as management, registration, and licenses will be exempted, with a total of 13 major items and 22 minor items charged. This is undoubtedly a timely help for overloaded small and medium-sized hardware enterprises. However, the author believes that energy efficiency and cost factors will still be a bottleneck for the development of the industry in 2012.

Artificial raw materials are bullish, and downstream finished products compete for copper and aluminum

From the middle to early December 2011, the international copper price has repeatedly reached new highs after exceeding 9000 US dollars per ton. Shanghai futures market data show that copper prices have risen by 32% within six months. In the first three quarters of 2011, the average price of iron ore increased by 289 yuan/ton compared to the same period in 2010, which is equivalent to an increase of 462 yuan/ton in the average iron ore cost per ton of steel. The continuous upward trend of steel prices also continued into the first quarter of 2012. In order to control inflation, China has repeatedly raised interest rates in the past year, and the slowdown in China's economic growth has also led to a decline in steel production, placing pressure on iron ore prices.

In 2012, the labor shortage remained severe, with severe labor shortages occurring simultaneously in coastal areas and the mainland, especially in the labor intensive hardware industry. On February 8th, the National Development and Reform Commission issued a further notice, deciding to increase the prices of gasoline and diesel by 300 yuan per ton from 0:00 on February 8th. It is estimated that the retail prices of No. 90 gasoline and No. 0 diesel (the national average) will increase by 0.22 yuan and 0.26 yuan per liter, respectively. It is understood that oil prices account for one-third of the logistics costs of hardware companies, and hardware companies spend no small amount of money on their logistics costs. Therefore, the increase in oil prices has a significant impact on the logistics and transportation of hardware companies. Rising labor costs for raw materials are undoubtedly still a pain for hardware companies

In the downstream of hardware enterprises, the dispute over copper and aluminum for air conditioning evaporators has always been a sensitive topic. It is understood that the use of air conditioner evaporator fins is the core component for the internal heat conversion of air conditioners. Wang Xiyang, Assistant President of Zhigao Air Conditioner Co., Ltd., once introduced that if the fins are made of all copper, their functional and operational performance will be relatively stable, which can maintain long-term surface cleanliness, inhibit microbial growth, and highlight the energy-saving effect of long-term use. However, it cannot be ignored that replacing aluminum with copper will increase costs. In January 2011, copper prices soared by 40%, and nearly half of the profits of air conditioning companies also evaporated. However, under the heavy pressure of costs, replacing copper with aluminum has become a potential rule for many air conditioning enterprises to save costs. In addition, copper is a scarce resource, and the demand for replacing copper with new materials is increasing. However, the effect of replacing aluminum is still controversial. It is understood that the copper fin air conditioner launched by Zhixin is 600-800 yuan more expensive than ordinary aluminum fin air conditioners.

Energy standards for household appliances are tightening, and the threshold for hardware accessories is increasing

In recent years, carbon tariffs and carbon labels have created new green barriers in trade. In response to the trend of global warming, awareness of emission reduction has become widespread worldwide, and low carbon electric heating continues to rise. However, the rapid economic growth of the domestic hardware industry is at the cost of resource waste, energy waste, and environmental pollution, which is an extensive economic growth mode. Although China's hardware products have undergone more than a decade of development, some enterprises have gradually formed a set of serialized, standardized, and branded management. Compared to domestic slightly lower quality production standards, in the face of international standards, not all hardware enterprises can quickly break through. As hardware and electrical accessories are required to produce finished household appliances that meet export specifications, the pressure on production support naturally increases significantly.

According to incomplete statistics, up to now, nearly 20000 international standards have been issued by the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC), among which green standards related to safety, energy conservation, and environmental protection account for a significant proportion.

Countries such as France, Germany, and the United Kingdom have adopted international standards as their entry criteria into the international market, while countries such as Northern Europe have also adopted international standards as their market entry criteria with little modification. The United States has also shifted its attitude towards adopting international standards from apathy to positivity, and even developing countries are increasingly interested in international standards. For example, the United States has comprehensively revised and strengthened the certification provisions of the Energy Star Program. Currently, the Energy Star label is applicable to more than 40 categories of products. In addition, countries such as Brazil, Mexico, Chile, Thailand, the Philippines, and the United Arab Emirates have also issued energy efficiency standards, regulations, or drafts for multiple products. Many developing countries have also followed the example of developed countries in introducing various energy efficiency standards and regulations. Countries such as Saudi Arabia and Israel have recently successively issued energy efficiency regulations. On February 3, 2011, the European Parliament passed an amendment to the WEEE Directive, which will raise the goal of Member States to recycle products and increase the cost of recycling for producers (EU importers and manufacturers).