In the past June, the ceramic market was not doing well, and the speed from prosperity to decline exceeded many people's expectations.
The wind rises at the end of Qingping. Unconsciously, the customer flow in the store decreased, the inventory in the warehouse increased, and customer orders decreased. The growth momentum is slowing down, operating costs are rising, overcapacity, material prices are rising, and the market is deserted... Both ceramic companies and dealers have experienced a sudden increase in operating pressure since June.
In the past year or so, including before May Day this year, the ceramic market has been extremely hot, showing a momentum of booming production and sales.
After the 2020 Spring Festival, affected by the epidemic, many production areas delayed the resumption of work. Gao'an ceramics companies that were the first to start construction have made a lot of money, and many companies' production and sales ratios have reached 100%.
After the epidemic was effectively controlled, the market rebounded quickly and demand exploded. Major production areas started production one after another. It can be said that goods are in rotation and kilns are booming. Many companies have orders that are scheduled for two or three months. For some companies, There was even a situation where it was hard to find a brick.
Dealers are rushing to grab orders and schedule production, and if they grab it, they will make money. In the past year or so, ceramic companies have rarely idled their production lines. Even if it is difficult to digest the products relying on their own brands and channels, OEMs will come to the door to achieve a balance between production and sales of the company.
This momentum continued until the end of last year. Although the market was almost shut down in the first quarter due to the Spring Festival and the epidemic, and major production areas started late, the annual ceramic tile output still reached 8.474 billion square meters, a year-on-year increase of 3.03%, especially in the two major production areas of Guangxi and Jiangxi. The growth rate exceeded 40%.
In 2021, this momentum continues. In addition to the Spring Festival, January and March are also traditionally the peak sales seasons for the ceramic tile market. After the Spring Festival this year, most ceramic companies started work relatively early, and the ignition rate of the production lines remained at a high level. What's even more popular is that the industry's craze for slate production lines has never stopped. From last year to this year, news of the ignition of a new slate production line by a certain company has come from time to time.
It can be said that in the first quarter of this year, even before May Day, most companies maintained a steady growth trend, and some companies sold out of stock, and were in a long-term situation of short supply. Due to insufficient production capacity, some companies and dealers have missed many orders.
In March, a slate manufacturer in Foshan achieved sales of over RMB 100 million in a single month, setting a new record for slate sales. Many products are loaded onto trucks and sent to the construction site as soon as they come out of the kiln. Whether you are a manufacturer, distributor or speculator in the ceramics industry, your life is quite prosperous.
As the saying goes, prosperity and decline are numerous. After entering May, the market gradually turned from warm to cold, and some companies began to experience overcapacity.
After entering June,This momentum continues. More and more companies are feeling the changes in the market, that is, demand is shrinking and orders are decreasing. Performance growth is weak and profits continue to decline.
Why does this happen? In the final analysis, on the one hand, due to the regulation of the real estate market, demand growth has slowed down significantly. On the other hand, industry production capacity has surged and competition has intensified.
According to data released by the National Bureau of Statistics, in 2020, the sales area of commercial housing nationwide was 1,760.86 million square meters, an increase of 2.6% over the previous year, and the sales area of commercial housing hit a record high.
From January to May this year, the sales area of commercial housing was 663.83 million square meters, a year-on-year increase of 36.3%; an increase of 19.6% from January to May 2019. Such a growth rate will inevitably provide huge market demand, ushering in a new round of development climax for the ceramic industry. This is also the fundamental reason for the sustained high growth of the industry in the last three quarters of 2020, including the first five months of 2021.
Another data worthy of attention is that in 2020, the land purchase area of real estate development companies nationwide was 255.36 million square meters, a year-on-year decrease of 1.1%. In the first five months of this year, the cumulative year-on-year growth rate of new construction was only 7%, the lowest in the same period in five years. In May, the growth rate dropped by 6% year-on-year, reaching negative growth. In addition, strict financing controls and land auctions have been combined. In the first five months, the land purchase area fell by 7.5% year-on-year, and the auction scale was the lowest in history.
The rapid slowdown in real estate growth and even record lows in land auctions are what worries the ceramic industry the most. Without the rapid growth of the real estate industry, there would be no huge market demand, and the ceramic industry would inevitably experience overcapacity, which would trigger a price war and worsen the ecological environment of the industry.
Of course, the disorderly expansion of the industry also brings many risks to the company's own operations. In recent years, although many production areas have strictly restricted the expansion of ceramic production capacity, the industry has still set off a new round of upsurge. Over the past year, many production areas have built and expanded many new production lines. Several major Leading companies have been aggressively enclosing land to build factories, further squeezing the living space of second- and third-tier brands.
The prosperity index of the ceramic industry has always been closely related to the real estate market. As the state continues to regulate the real estate industry, its growth rate will further slow down, and the ceramic industry will also enter a downward channel simultaneously. Fortunately, the ceramic industry has opened up a new blue ocean in the home furnishing market through the new species of slate in recent years, which will allow ceramic companies to gain new growth in another market.
No matter what, the rise and fall of the industry and the coldness of the marketThe fate of enterprises and enterprises is closely related to the external environment. It can be predicted that in the second half of the year, the ceramic market will further cool down. The market in 2022 will not improve much.
Winter is coming. The real trough of the industry is yet to come.
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Author｜Wang Li
Cultural Director of Mona Lisa Group
Original title: "The market has turned from hot to cold, and the pressure on ceramic enterprises has increased sharply"
(This article is reproduced from Tao Xin Information)
