Fed's New Deal LED industry profits may be squeezed

In the early hours of September 14, Beijing time, the Fed launched the third round of quantitative easing measures (QE3). Under the stimulation of QE3, the price of precious metal assets such as gold and silver rose rapidly and hit a new high for more than six months. Last Friday, A shares Coal, nonferrous metals and other resource stocks performed strongly. “Comparing the previous two quantitative easing policies, the price of gold has trended to rise by about 30% around one year before and after the introduction of the policy.” Some analysts indicated that, as in the previous two, QE3 was introduced. The trend effect on gold prices is even more pronounced.

At the same time, 70% of the U.S. dollar for the US quantitative easing policy has flowed into the international market, and input-type inflation has obviously brought challenges to China.

Recalling that the impact of the two QEs in history has increased US economic growth and US dollar liquidity, while the continued increase in the liquidity of the US dollar and the strengthening of inflation expectations, the significance of metal prices has become more apparent, and it has been held in the non-ferrous metal industry chain. Mining companies with scarce resources such as copper and tin will be favored by the market, but the profitability of processing and manufacturing companies that use these metals as their production materials will continue to be adversely affected. For the LED industry, there will undoubtedly be further improvement of the upper and middle reaches enterprises. The cost of production, the industry's profits will be squeezed.

On the other hand, industry analysts believe that the far-reaching role of QE3 will not be reflected in the short-term, but will have a profound impact on US dollar liquidity and economic growth at a relatively long period. This may lead to LED companies exporting to Europe and the United States. Relatively positive influence.