In the first half of 2021 that has just passed, Guangdong ceramic companies have experienced a hot production situation. "Out of stock" has become a high-frequency hot word. If you go to ceramic companies, almost every one will say "out of stock" - ceramic tiles Out of stock, rock slabs are also out of stock, ceramic manufacturers are out of stock, and customers are pressing for goods. Many manufacturers said that "orders are scheduled for at least one or two months later."
An OEM told "Ceramic Information" that it was particularly difficult to find OEM factories in Guangdong production areas in the first half of the year. They would have to wait in line for at least a month and at most two months. Orders with complex designs and colors were not accepted, and the shipment volume Small, if the relationship with the factory is not strong enough, please wait...
In mid-June, a ceramic factory said: "Our factory's orders have been scheduled until August, and we are busy rushing to get orders every day." Another ceramic factory said that we used to help others OEM, but this year due to production schedule Nervous, we looked everywhere for factory OEM.
In short, the production schedule is tight and the supply exceeds the demand. But when I go to the terminal market, the dealers say that business is deserted and the flow of people is sparse. Where have all the ceramic tiles been sold? Why Guangdong's production areas were "out of stock" everywhere in the first half of this year? "Ceramic Information" summarized three major reasons by visiting a large number of ceramic companies and OEMs.
Reason 1
Guangdong will withdraw from 217 lines in 2020
Production capacity shrank sharply by 900 million square meters
One of the reasons for Guangdong's "out of stock" in the first half of the year may be inseparable from the sharp shrinkage of production capacity - 217 production lines were withdrawn in just one year in 2020, with an annual production capacity of over 900 million square meters, which can be called the "ceramics industry" The largest wave of exits in the past decade.”
According to data released by the Information Office of the Guangdong Provincial Government on May 26: of the 894 construction ceramic production lines deployed in Guangdong's pollution prevention and control battle, as of the end of April 2021, 105 have been dismantled, 112 have been permanently suspended, and 677 are in use. There are 664 lines that have been fully connected to natural gas.
In other words, since 2020, the "largest-scale coal-to-gas swap" launched in Guangdong Province has directly led to the dismantling and shutdown of 217 production lines. This officially released data is basically consistent with the data from the 2020 "Ceramic Information" "Ceramic Industry Long March" survey (the subtle difference lies in product classification and statistical caliber), and its accuracy is beyond doubt.
According to statistics from "Ceramic Information", before Guangdong Province "gets serious" in promoting "coal-to-gas" in the beginning of 2020, there are roughly 900 production lines in the province, including 260 in Zhaoqing, 160 in Qingyuan, and 129 in Jiangmen. , about 260 in Foshan...
After the "coal-to-gas" transition was fully completed, official data showed that 55 lines were shut down and withdrawn in Zhaoqing, more than 40 lines were shut down in Qingyuan, and 185 lines in Foshan were eligible for clean energy subsidies (withdrawal of approximately 70)...The total number of production lines withdrawn is equivalent to 24% of Guangdong Province and 8% of the country; the natural gas utilization rate of Guangdong Jiantao has also soared from less than 5% at the end of 2019 to 82.2%.
What is the concept of 217 production lines? The number is equivalent to 1.32 Gaoan (165 lines), 2.4 Jiajiang (89 lines), 2.7 Zibo (80 lines)...
If calculated based on the average daily production capacity of a single line in Guangdong Province of 13,700 square meters, the annual production capacity of these 217 lines has reached an astonishing 920 million square meters, exceeding the country's largest county-level ceramic production area-Jiangxi Gao'an ( 878 million square meters), which is equivalent to the production capacity of Quanzhou (Jinjiang + Nan'an) in Fujian Province, and also exceeds the entire province of Shandong (768 million square meters).
Such a large number of production lines and production capacity were shut down and withdrawn in a short period of time, which to a certain extent resulted in a "hot sales" situation with tight production capacity supply in Guangdong.
Reason 2
Gas shortage, high gas prices, skyrocketing costs, power rationing
As a result, many production lines have limited or reduced production...
While production capacity has been significantly reduced, it is difficult for the remaining production lines to ensure normal production due to objective reasons. Since November last year, many factors such as high natural gas prices, gas shortages (restrictions on gas use), skyrocketing raw material costs, power cuts, etc. have caused many production lines in Guangdong to suspend production or reduce production...
From November to December 2020, Qingyuan, Guangdong Province experienced gas restrictions due to skyrocketing domestic gas prices and tight LNG supply, resulting in many ceramic companies being forced to limit production for several days. At the same time, excessive pressure in gas supply pipelines and damaged pipelines during construction have also caused gas outages, affecting normal production of enterprises.
In addition, at the end of 2020, affected by the "coal-to-gas"; Impact, LNG supply shortages have appeared throughout Guangdong. Due to insufficient gasification capacity and rising gas prices, many production lines have stopped kilns early. By late December, the arrival price of LNG in Guangdong was once as high as 7,200 to 7,500 yuan/ton, and the converted gas price exceeded 5 yuan/m³ (the highest ever exceeded "7").
Soaring gas prices and insufficient gas sources have led to large-scale shutdowns of production lines in Guangdong, especially in production areas that are highly dependent on LNG. Even ceramic companies that are producing normally have high production costs.
This round of gas shortage and high gas prices has not only affected Guangdong ceramic enterprises, but also Shandong, Fujian and other production areas have been severely affected. In Quanzhou, Fujian, due to the large natural gas shortage at the end of December last year, the local government coordinated with industrial enterprises to adopt production restriction measures, which resulted in the suspension of 22 ceramic production lines in Nan'an and the suspension of 1/3 of the production lines in Jinjiang. In the Shandong production area, the price of LNG once exceeded 6.4 yuan/m³ and the price of pipeline natural gas rose to more than 3 yuan/m³, which resulted in Linyi ceramics companies being forced to shut down their kilns at the end of December.
In general, due to factors such as the epidemic, coal-to-gas conversion, and high gas prices, many ceramic factories across the country shut down their kilns for maintenance ahead of schedule at the end of 2020. The shutdown time was much earlier than in previous years, so they were unable to prepare as well as in previous years. There is enough inventory, and even many orders a year ago were not delivered as scheduled.
At the beginning of 2021, raw material prices have risen "across the board", which has also affected the normal resumption of production of ceramic companies. In Guangdong Province, the annual gas price in some production areas reaches a maximum of 3.25 yuan/m³, resulting in most ceramic factories not being able to produce bricks until after March 15.
After the full resumption of production, the costs of coal, chemical materials, cartons, labor, etc. have increased, and the production of ceramic enterprises has once again faced huge challenges. Production costs continue to rise, but it is difficult for ceramic tile prices to rise simultaneously, which has a significant impact on the normal production of product categories with low profits and low added value.
“There has just been a wave of price increases, followed closely by another wave of electricity rationing.” In May, ceramic production areas such as Zhaoqing, Qingyuan, Enping, Foshan and other Guangdong ceramic production areas successively received notices of “peak electricity consumption” , and continues to upgrade: from "start six and stop one" to "start five and stop two", then to "start four and stop three"...
Strict power consumption and strict power rationing have once again affected the normal production of many ceramic factories and have to reduce production. At the same time, in addition to the "peak shifting electricity consumption" brought byIn addition to rising costs, high natural gas prices have also had a great impact on ceramic factories. By June, the price of liquefied natural gas in the ceramic production areas of Qingyuan, Zhaoqing and Enping in Guangdong was about 3.2 yuan/m³. Compared with the same period last year, it increased by about 1 yuan/m³, which once again affected the normal production of ceramic companies.
Reason 3
Real estate construction deadline after the epidemic
Concentrated outbreak of engineering and construction site orders
It is worth noting that on the one hand, manufacturers have tight production schedules, and on the other hand, dealers generally report that "the terminals have no business." A Guangdong ceramic enterprise told "Ceramic Information" that 70% of terminal dealers reported poor business and weak market this year. "Our salesmen went on business trips to terminals, and the feedback was also that the building materials market was sparsely populated and business was deserted."
The production schedule is booming, but the terminal sales are deserted. Where have all the ceramic tiles been sold?
According to the analysis of Ceramics Enterprises, this strong contrast is closely related to the epidemic. In 2020, the construction of many real estate projects and construction sites was suspended due to the epidemic. However, from the second half of last year to this year, due to the better control of the domestic epidemic, the construction of many real estate projects began to speed up, and efforts were made to meet the construction deadlines and strive to deliver the buildings on time, which stimulated project orders growth.
“This type of project orders are not only from real estate developers that ceramic companies are in contact with, but also from many dealers themselves. If there is no goods, dealers are also very anxious.”
Not only the Guangdong production area, "Ceramic Information" learned from Jiangxi, Shandong and other ceramic production areas that the production schedule in April and May this year was tight, mainly due to OEM orders and construction site orders. For example, in Zibo, Shandong, there has been a significant increase in orders from construction sites inside and outside the province this year, which has stimulated the hot sales of antique bricks, interior wall tiles and other categories, and has become a strong support for Zibo ceramic enterprises to cope with the current off-season sales.
However, according to the predictions of many industry insiders, the current situation of severe overcapacity of ceramic tiles has not been effectively changed. The overall ceramic tile market is still oversupplied, especially the structural oversupply and shortage of ceramic tiles. The best-selling Some categories and designs are out of stock, and slow-selling categories and designs are overstocked. In fact, ceramic tile sales have been declining since June, and it is expected that the "tight production schedule" situation in Guangdong production areas will change in the second half of this year.
(This article is reproduced from Ceramic Information)
