Rapid growth slows down the building materials industry to suffer from overcapacity
2023-03-27 12:13:25
For seven years, the wealthy feast of the building materials industry started this year. According to the latest statistics, the growth rate of the building materials industry in the first half of this year fell by 16.6 percentage points, which is the lowest level in the same period since 2003, and even lower than the level of 17.6% in the same period of 2009 after the financial crisis. The decline in profits was even more serious, with the cement industry, which accounts for the largest share, with an average drop of 60% in profits and a total loss in the glass industry.
At the conference on the economic situation of the building materials industry held in the first half of the day, Qiao Longde, chairman of the China Building Materials Federation, said that when the market conditions were not good, it completely exposed the substantial progress of structural adjustment. The oversupply of the market, the rate of decline in profits is much higher than the rate of decline in operating income. In the context of the increase in total volume, profits have fallen sharply, which shows that the previous growth mode was driven by scale operations, and the development of building materials industry urgently needed to change the development mode.
Overcapacity impacts price bottom line
Under the catalysis of the unilateral downward demand, the newly added capacity has broken the long-standing supply and demand relationship. The long-term accumulation of excess capacity, such as volcanic eruptions, has directly affected the bottom line of the market and price.
At present, the relationship between supply and demand has reversed, prices have begun to turn downward, and the magnitude has continued to deepen. In the first five months of this year, the total ex-factory price of building materials and non-mineral products fell by 0.5% over the same period of last year. The decline in the ex-factory price of building materials and non-mineral products further increased in June, and fell by 0.5% from May, including cement and cement clinker, cement products, concrete structural components, building stone products, technical glass, bricks and building materials. The ex-factory price of products such as blocks, glass fiber and products, limestone, and gypsum mine decreased. The total ex-factory price of building materials and non-mineral products dropped by 1.2% in the first six months of the previous year.
Cement, which has the largest share of the building materials industry, has returned to its 2008 level. In addition to rising prices in the Northeast, the six major regions have all fallen sharply. The average price decline in the country was 20%, while the rate of decline in the east China region reached 30%.
The glass industry was even the “stricken areaâ€. Although prices rebounded in May and June, the average ex-factory price for flat glass was still only 64.4 yuan per weight box in June. The average price in the previous June was 14.9 yuan lower than the same period of last year. Far more than the normal annual profit per unit weight of flat glass, the industry has suffered a total loss.
"The huge capacity that was rapidly accumulated in the rapid economic start-up will be the source of pain for the cement and glass industries in the coming period." Industry experts said.
According to the latest statistical data issued by the China Federation of Building Materials, the growth rate of the building materials industry in the first half of this year has dropped sharply. The added value of the building materials industry above designated size has increased by 11.3% over the previous year at a comparable price, and the growth rate has dropped by 16.6% from the same period of last year. . Since 2003, the traditional building materials driven by investment have grown rapidly. The growth rate of the building materials industry has been maintained at an average annual rate of 25%. Even in the financial crisis, in 2009, the added value of the building materials industry above designated size increased by 21.1%. This all ended this year.
"Regulations" and "regulations" have basically disappeared
Traditional industries cannot bear the pain of overcapacity. Profits have fallen sharply. They represent another major growth factor for the vitality of emerging industries and building materials industries. “Regulation companies†have been transferred to “regulatory enterprises†and this year has disappeared, accelerating construction materials. The speed at which the industry falls.
After 2008, the growth rate of the traditional industries in building materials is equal to that of steel, nonferrous metals and petrochemical industries, which are all around 15%. However, brick and building blocks, concrete and cement products, building stones, and new-type building materials, and building materials sub-sectors with high value-added products have nearly 10,000 companies each year, expanding the scale of production and sales, Become a "regulatory enterprise" and become a new force in the building materials industry, greatly pushing up the growth rate of building materials industry above designated size.
Therefore, after 2003, the growth rate of the building materials industry above designated size was higher than that of the industrial average of the same period, and it was far higher than the steel, nonferrous metals and petrochemical industries that belonged to the basic raw material industry.
However, the expansion of the scale of brick, concrete and cement products and the increase in the number of companies this year have come to an end. The disappearance of the "enterprise under regulations" and "regulations on enterprises" has accelerated the decline in the growth rate of the building materials industry. In the first half of this year, the growth rate of the building materials industry was higher than that of steel, which was comparable to that of the petrochemical industry.
“The emerging industry has not developed at this time.†Qiao Longde said, “This is a low tide, and the practice of waiting for the arrival of the next wave of climax is the old imperial calendar. The past growth of the building materials industry depends on investment and strong growth in the real estate industry. These two factors will not be greatly developed in the future, so the building materials industry must transform the mode of production, through transformation and upgrading, the development of new products, to achieve the second half of the growth.The future growth to achieve two breakthroughs - the traditional industry in deep processing And the industry chain seeks breakthroughs, new industries seek substantial breakthroughs, and new technologies, new products, and new standards are embodied.â€
Growth is expected to stabilize in August
The China Federation of Building Materials expects that the growth rate of the building materials industry will stabilize after the second half of this year, and the decline rate of the profits of the building materials industry will gradually narrow in the second half of the year. The total profit realized in the whole year is expected to be close to the level of last year, achieving steady progress. .
According to the economic operation data released by the National Bureau of Statistics, China's national economy was generally stable in the first half of the year. Investment in fixed assets, especially in the central region, will continue to play a role in the building materials industry. This year, the growth rate of investment in fixed assets in the central region of the country has been the fastest, with a year-on-year growth rate of 25.3%. In the first half of this year, the growth rate of 11.3% for the entire building materials industry contributed 5.5 percentage points to the contribution of the building materials industry in the central region. The investment growth rate in the eastern region is the lowest, but the eastern region still accounts for 50% of the total investment in fixed assets in the country, and the consumption of building materials products driven by 19.3% year-on-year growth is still large. The national fixed asset investment will still maintain a certain growth rate, and it will still have a strong driving effect on the growth of the building materials industry.
The impact of the global economic downturn on the export of China's building materials continues to expand and expand. However, the upgrading of export product structure and diversification of export regions have enhanced the anti-risk capabilities of China's building materials products in the international market. In the first quarter of this year, the export of building materials to the EU fell by 2.6% year-on-year, and in the first half it rose to 5.5%. Exports of building materials in the Asia-Pacific region rose from 11.9% in the first quarter to 15.9% in the first half of the year, while exports to ASEAN increased from 12.9% to 23.2%. Building materials, some industries and products, and exports are still important contributing factors.
From the perspective of the increase in production and profitability of the construction stone and light building materials industries this year, the domestic consumer market is playing an increasing role in building materials. The increase of consumer-driven factors has a positive significance in transforming the development mode of the building materials industry, adjusting the industrial structure, and maintaining steady and rapid growth.
The cement industry, which accounts for the largest proportion of the building materials industry, is expected to stabilize prices in August. Prices in the Nanjing area have shown signs of stabilization, and prices in neighboring Zhejiang, Jiangxi and other places will also gradually stabilize. At the same time, with a slight rebound in the economic outlook in the second half of the year, coal prices may rise, leading to an increase in cement costs or an increase in cement prices. In addition, new production capacity in East China was basically released in the first half of the year, and new capacity pressure was eased in the second half of the year.
After a rapid correction of prices, most regions are close to the full cost line. In some regions, between cash costs and full costs, it is expected that the decline in cement prices in August will narrow, and may gradually stabilize in the second half.
At the conference on the economic situation of the building materials industry held in the first half of the day, Qiao Longde, chairman of the China Building Materials Federation, said that when the market conditions were not good, it completely exposed the substantial progress of structural adjustment. The oversupply of the market, the rate of decline in profits is much higher than the rate of decline in operating income. In the context of the increase in total volume, profits have fallen sharply, which shows that the previous growth mode was driven by scale operations, and the development of building materials industry urgently needed to change the development mode.
Overcapacity impacts price bottom line
Under the catalysis of the unilateral downward demand, the newly added capacity has broken the long-standing supply and demand relationship. The long-term accumulation of excess capacity, such as volcanic eruptions, has directly affected the bottom line of the market and price.
At present, the relationship between supply and demand has reversed, prices have begun to turn downward, and the magnitude has continued to deepen. In the first five months of this year, the total ex-factory price of building materials and non-mineral products fell by 0.5% over the same period of last year. The decline in the ex-factory price of building materials and non-mineral products further increased in June, and fell by 0.5% from May, including cement and cement clinker, cement products, concrete structural components, building stone products, technical glass, bricks and building materials. The ex-factory price of products such as blocks, glass fiber and products, limestone, and gypsum mine decreased. The total ex-factory price of building materials and non-mineral products dropped by 1.2% in the first six months of the previous year.
Cement, which has the largest share of the building materials industry, has returned to its 2008 level. In addition to rising prices in the Northeast, the six major regions have all fallen sharply. The average price decline in the country was 20%, while the rate of decline in the east China region reached 30%.
The glass industry was even the “stricken areaâ€. Although prices rebounded in May and June, the average ex-factory price for flat glass was still only 64.4 yuan per weight box in June. The average price in the previous June was 14.9 yuan lower than the same period of last year. Far more than the normal annual profit per unit weight of flat glass, the industry has suffered a total loss.
"The huge capacity that was rapidly accumulated in the rapid economic start-up will be the source of pain for the cement and glass industries in the coming period." Industry experts said.
According to the latest statistical data issued by the China Federation of Building Materials, the growth rate of the building materials industry in the first half of this year has dropped sharply. The added value of the building materials industry above designated size has increased by 11.3% over the previous year at a comparable price, and the growth rate has dropped by 16.6% from the same period of last year. . Since 2003, the traditional building materials driven by investment have grown rapidly. The growth rate of the building materials industry has been maintained at an average annual rate of 25%. Even in the financial crisis, in 2009, the added value of the building materials industry above designated size increased by 21.1%. This all ended this year.
"Regulations" and "regulations" have basically disappeared
Traditional industries cannot bear the pain of overcapacity. Profits have fallen sharply. They represent another major growth factor for the vitality of emerging industries and building materials industries. “Regulation companies†have been transferred to “regulatory enterprises†and this year has disappeared, accelerating construction materials. The speed at which the industry falls.
After 2008, the growth rate of the traditional industries in building materials is equal to that of steel, nonferrous metals and petrochemical industries, which are all around 15%. However, brick and building blocks, concrete and cement products, building stones, and new-type building materials, and building materials sub-sectors with high value-added products have nearly 10,000 companies each year, expanding the scale of production and sales, Become a "regulatory enterprise" and become a new force in the building materials industry, greatly pushing up the growth rate of building materials industry above designated size.
Therefore, after 2003, the growth rate of the building materials industry above designated size was higher than that of the industrial average of the same period, and it was far higher than the steel, nonferrous metals and petrochemical industries that belonged to the basic raw material industry.
However, the expansion of the scale of brick, concrete and cement products and the increase in the number of companies this year have come to an end. The disappearance of the "enterprise under regulations" and "regulations on enterprises" has accelerated the decline in the growth rate of the building materials industry. In the first half of this year, the growth rate of the building materials industry was higher than that of steel, which was comparable to that of the petrochemical industry.
“The emerging industry has not developed at this time.†Qiao Longde said, “This is a low tide, and the practice of waiting for the arrival of the next wave of climax is the old imperial calendar. The past growth of the building materials industry depends on investment and strong growth in the real estate industry. These two factors will not be greatly developed in the future, so the building materials industry must transform the mode of production, through transformation and upgrading, the development of new products, to achieve the second half of the growth.The future growth to achieve two breakthroughs - the traditional industry in deep processing And the industry chain seeks breakthroughs, new industries seek substantial breakthroughs, and new technologies, new products, and new standards are embodied.â€
Growth is expected to stabilize in August
The China Federation of Building Materials expects that the growth rate of the building materials industry will stabilize after the second half of this year, and the decline rate of the profits of the building materials industry will gradually narrow in the second half of the year. The total profit realized in the whole year is expected to be close to the level of last year, achieving steady progress. .
According to the economic operation data released by the National Bureau of Statistics, China's national economy was generally stable in the first half of the year. Investment in fixed assets, especially in the central region, will continue to play a role in the building materials industry. This year, the growth rate of investment in fixed assets in the central region of the country has been the fastest, with a year-on-year growth rate of 25.3%. In the first half of this year, the growth rate of 11.3% for the entire building materials industry contributed 5.5 percentage points to the contribution of the building materials industry in the central region. The investment growth rate in the eastern region is the lowest, but the eastern region still accounts for 50% of the total investment in fixed assets in the country, and the consumption of building materials products driven by 19.3% year-on-year growth is still large. The national fixed asset investment will still maintain a certain growth rate, and it will still have a strong driving effect on the growth of the building materials industry.
The impact of the global economic downturn on the export of China's building materials continues to expand and expand. However, the upgrading of export product structure and diversification of export regions have enhanced the anti-risk capabilities of China's building materials products in the international market. In the first quarter of this year, the export of building materials to the EU fell by 2.6% year-on-year, and in the first half it rose to 5.5%. Exports of building materials in the Asia-Pacific region rose from 11.9% in the first quarter to 15.9% in the first half of the year, while exports to ASEAN increased from 12.9% to 23.2%. Building materials, some industries and products, and exports are still important contributing factors.
From the perspective of the increase in production and profitability of the construction stone and light building materials industries this year, the domestic consumer market is playing an increasing role in building materials. The increase of consumer-driven factors has a positive significance in transforming the development mode of the building materials industry, adjusting the industrial structure, and maintaining steady and rapid growth.
The cement industry, which accounts for the largest proportion of the building materials industry, is expected to stabilize prices in August. Prices in the Nanjing area have shown signs of stabilization, and prices in neighboring Zhejiang, Jiangxi and other places will also gradually stabilize. At the same time, with a slight rebound in the economic outlook in the second half of the year, coal prices may rise, leading to an increase in cement costs or an increase in cement prices. In addition, new production capacity in East China was basically released in the first half of the year, and new capacity pressure was eased in the second half of the year.
After a rapid correction of prices, most regions are close to the full cost line. In some regions, between cash costs and full costs, it is expected that the decline in cement prices in August will narrow, and may gradually stabilize in the second half.
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