June every year is the traditional off-season for sales in the ceramic industry. This year, not only is the off-season market more obvious, but ceramic companies are also under greater operating pressure. On the one hand, sales are sluggish and the inventories of many ceramic companies have skyrocketed; on the other hand, production costs continue to rise, further eroding the already meager profit margins of ceramic companies.
Due to the surge in inventory, since June, ceramic companies in major ceramic production areas across the country have begun to suspend production and production lines. For example, in Gao'an and surrounding production areas in Jiangxi, there are categories including glazed tiles, antique tiles, and Western tiles. About 20 production lines have been suspended (for details, see: The highest gas price is 3.78 yuan/m³, and more than 20 production lines of Pangaoan have been suspended).
Recently, "Ceramic Information" visited production areas in Shandong and learned that as inventory pressure continues to increase, ceramic companies continue to respond to the off-season by cutting production capacity, suspending production, and suspending production lines. According to incomplete statistics, as of now, about 15 production lines in Shandong production areas have been suspended. In addition, many ceramic companies have reduced production line capacity to relieve production capacity pressure.
About 15 production lines have been suspended in the province
As soon as June entered, the sales of most ceramic enterprises in Shandong were cold and sales plummeted, especially in the off-season. "The previous boom in sales was an illusion. The end market demand was not that strong. Especially after the Dragon Boat Festival, the sales of many companies declined rapidly." A sales manager of a ceramics company in Zibo who did not want to be named told Ceramic Information "express.
An industry insider in Linyi even lamented: "I don’t know what happened to the market in June this year. Compared with the previous two years, the sales this year are far behind."
According to "Ceramic Information", as inventory pressure continues to increase, some ceramic companies have begun to suspend production lines to reduce inventory pressure. Since the beginning of June, some ceramic companies in Shandong have achieved the purpose of reducing inventory by shutting down some production lines.
As of now, about 15 production lines in Shandong production areas are suspended, including 8 in Linyi production areas, 5 in Zibo production areas, and 2 in other cities.
However, sales of ceramic companies have not improved due to the suspension of some production lines, especially as inventory pressure remains high. Under this situation, many ceramic companies have to reduce production line capacity to reduce current inventory pressure. In the Linyi production area, many ceramic companies have shut down a glazing line and tried their best to reduce the production line capacity in order to maintain a balance between production and sales.
In this "production reduction operation", Linyi ceramic enterprises have only opened 3 of the 4 glazing lines, and only 2 of the 3 glazing lines have been opened. In addition, some manufacturers have controlled production capacity by slowing down the kiln speed. , in order to control the inventory processFast growth.
But despite this, reducing production line capacity did not meet corporate expectations. "Even if one glazing line is stopped, the daily production capacity cannot be sold out. Our company has reduced production capacity by 41%, but the current production and sales rate can only reach 60%, and we cannot even sell 50% of the original production capacity." Shandong A person in charge of a ceramics company who wished to remain anonymous told "Ceramic Information" frankly.
In the view of the person in charge of the above-mentioned ceramic enterprise, if the production capacity reduction still cannot ensure the balance of production and sales, then the next step will be to stop production.
Meager profits and skyrocketing costs are the driving force behind production suspensions
After entering the off-season, due to sluggish sales, some ceramic companies adopted "price reduction promotions" to increase sales, but the effect was not obvious. As a result, after the price reduction, not only did the sales volume of ceramic tiles not change much, the company's only profit also disappeared with the price reduction. Especially ceramic companies that use "short-term, flat and fast" marketing methods do not have enough profit margins to support them.
“I don’t dare to talk about profits now. I just hope that we can maintain it and break even.” The general manager of a Linyi ceramics company said frankly. In his view, since it has been verified that price is not a factor, it is necessary to re-examine the current market situation.
As we all know, since the beginning of this year, the prices of various raw materials have risen sharply, further pushing up the production costs of ceramic companies. On the other hand, due to fierce competition, the prices of ceramic tiles of most ceramic companies have not increased accordingly, which has greatly increased the operating and cost pressures of many ceramic companies.
The general manager of the above-mentioned Linyi ceramic company introduced that since the beginning of the year, his company’s procurement costs have continued to increase. Zirconium silicate has increased from more than 12,000 yuan per ton to more than 18,000 yuan, and zinc oxide has increased from 14,000 yuan per ton to 18,000 yuan. A single carton Prices have also increased by 0.2-0.22 yuan on average, and the cost of earth materials such as feldspar and kaolin has increased by 8%-10% on average, which has invisibly wiped out the already meager profits.
In addition, the price of gas this year is also much higher than last year, especially in the Linyi production area. "Last year, our natural gas price was 1.9 yuan/m³, but this year it has risen to 2.6 yuan/m³. Recently, we received a notice from the gas company that the natural gas price will increase in the future." The above-mentioned general manager of Linyi Ceramics Enterprise told " Ceramic Information".
In fact, whether it is rising natural gas prices or rising coal prices, these are important drivers that force many ceramic companies to reduce or suspend production. They are also an important factor that continues to push up the production costs of ceramic companies. According to "Ceramic Information", the currentThere was already a ceramics company in the former Shandong production area, which had to suspend production due to the excessive increase in coal prices.
(Article reproduced from Ceramic Information)
