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Falling prices do not equate to a decline in production costs for enterprises; on the contrary, due to increases in labor and industrial raw materials, many enterprises' production costs have not decreased but have risen instead.
The orders provided by Britain and Russia fell below market expectations, leading to a situation where supply exceeded demand in multiple industries. Against this backdrop, the days were naturally tough for the processing and manufacturing industry.
To survive, everyone had no choice but to engage in price wars. Those companies that reacted quickly fared better, at least making a fortune at the outset of the war last year.
There was a market pullback in the first quarter, but overall the profits were still decent. After entering the second quarter, however, it was tragic as a bunch of people, fantasizing about war fortunes, joined in, further intensifying market competition.
