Global Earthquake Frequently Raise Hardware Raw Material Costs

Frequent earthquakes around the world, allowing reporters to review the series of reports before the site, also set off an upsurge of the impact of the earthquake on the hardware and electronic machinery industry. The Philippines is located on the volcanic belt of the Pacific Rim. Earthquakes frequently occur due to the collision of the tectonic plates, and volcanic activity is also quite active. On August 16, 1976, a 7.9-magnitude earthquake struck Morro Bay in the southern Philippines and caused a tsunami, resulting in at least 5,000 deaths.

At 1:15 a.m. local time on the 26th, a 5.9-magnitude earthquake struck Zambales Province in northern Philippines. The earthquake lasted 10 to 30 seconds, and some of the tall buildings in the area were shaking. After the earthquake, there were three smaller magnitude earthquakes in this area, and the highest magnitude was Richter scale. The epicenter of the quake was located 13 kilometers northwest of Ibara, capital of the northern part of the northern Philippines, and was surrounded by cities including Metro Manila.

Chile is the world’s largest producer of copper, and its copper reserves and exports have ranked first in the world, with proven reserves of more than 200 million tons, accounting for 34% of the world’s total reserves, and mining and exporting of copper in the world. The industry plays an important role. The world's largest copper mine is located in northern Chile. However, the closer it is to the world, the more susceptible it is to the world. Beijing on February 27, 2010, a 8.8-magnitude earthquake struck Chile, causing major loss of personnel and property.

Affected by the international market, domestic copper prices have also begun to rise all the way to the metal companies, bringing significant cost pressures. An expert from the Organizing Committee of the China International Hardware Show (CIHS'10) stated that “The Chilean earthquake has had a tremendous impact on international copper prices. In February, the futures price of copper on the New York Mercantile Exchange has been continuously rising, and international copper prices have increased by 7.6%.

The most obvious is that this year's Pearl River Delta region in China suffered a serious “labour shortage” and labor costs have risen sharply. However, the Southeast Asian region suffered a major drought in a century, and a large number of illegal immigrants from northern Vietnam flooded into the Pearl River Delta region to find employment opportunities and filled the labor gap. This has, to some extent, reduced labor costs. Global earthquakes frequently affect the cost of raw materials. Various meteorological disasters also affect the labor market, causing a slight change in the labor costs of hardware companies.

Most of China's hardware companies are export processing or OEM-type enterprises, use domestic labor resources to process and produce related hardware products for foreign companies, and then export to international markets. According to reports from the Global Hardware Network, with the deepening of globalization, the hardware industry is now an "global industry." Metal products are mainly made of steel, iron, copper, aluminum and other metals. At present, China's iron ore and nonferrous metal raw materials are heavily dependent on imports. China's hardware industry presents a clear "import, production (processing), export" industry form, and has become an important part of the international hardware industry chain, and has a close connection with the world's raw materials and product sales markets.