Market Analysis: Why Sanitary Enterprises Are Sad

In 2012, China's plumbing and sanitary ware market faced numerous thorns, inflation, and the state's many adjustments to the ore industry. Since last year, the prices of raw materials for ceramic sanitary plumbing, especially chemical raw materials, have risen like rockets. On the one hand, the rising cost of production and the sluggish market on the other, ceramic sanitary plumbing companies have become increasingly difficult in such an industry.

Some plumbing porcelain in a plumbing bathroom in an ancient lane in Chaozhou is a mountainous place. How to reduce the scrap rate, recycling of waste porcelain is a major issue for companies to reduce production costs.

In the past few years, the prices of sanitary plumbing and sanitary raw materials have basically kept rising by a certain extent. However, with the financial crisis sweeping across the globe, inflation and the state's many adjustments to the ore industry, starting from last year, raw materials for ceramic plumbing and sanitary ware, especially The price of chemical raw materials rose like a rocket. On the one hand, the rising cost of production and the sluggish market on the other, ceramic sanitary plumbing companies have become increasingly difficult in such an industry.

The continuous price increase of raw materials has greatly impacted the ceramic plumbing sanitary companies. For example, yttrium oxide extracted and refined from rare earth ore is reported to have risen from 70,800 yuan/ton in 2009 to about 600,000 yuan/ton in recent days. The sharp increase in the cost of color glaze has caused color glazing companies to have to raise prices to cope with it, so the cost pressure has been passed on to companies. As a whitening agent, zirconium silicate, from the original 11,000 yuan / ton, rose to 23,000 yuan / ton. In addition to the soaring cost of raw materials, ceramic sanitary plumbing companies also suffer from the shortage of raw materials. The rise of raw materials stems from the country's repeated adjustments to the land and mineral resources and the rigid requirements of the sanitary plumbing areas where ceramics and plumbing originates from all over the country. Seeking greater than supply, the production of ceramic sanitary plumbing companies has a great impact. For example, the price of antimony oxide at the beginning of the year is only 15,000 yuan/ton, and the current price of 200,000 yuan/ton is not necessarily available to the company. Qianghui ceramic plumbing bathroom related to the person in charge told reporters, in order to deal with the skyrocketing chemical raw material prices, strong-hui ceramic sanitary plumbing bathroom products have been adjusted, the original large amount of chemical raw materials used in large-scale brick phase production.

In addition to the impact of rising raw materials on ceramic sanitary plumbing companies in operation, many of the proposed production lines have been postponed and the owner of the new line has doubts. It is understood that a ceramic sanitary plumbing distributor in Jiangxi Province, after the development and expansion, had originally put in a local production of polished tiles, tiles, seeing raw material prices a "mad" and "crazy", even if the land has been flat, kiln, press It has been booked, but now it is also completely unsubscribed. The boss said that the pressure on the line is not as big as it would be if the price of raw materials rises later.

SMEs are miserable In recent years, in the context of the financial crisis, inflation, rising oil prices, labor shortage, etc., the ceramic sanitary plumbing industry has been in the "up" sound, most companies are already accustomed to. However, since last year, the huge increase in raw materials has put companies under tremendous pressure. Gao Zhong Hongxin Ceramic Plumbing Sanitary Ware Co., Ltd. General Manager Tu Zhong Wang told reporters that compared with last year, the company's daily production and operating costs rose by about 6%. The biggest rise is raw materials and staff salaries. Some chemical raw materials prices have even increased several times. According to Qiu Aibin, manager of Taitao Plumbing and Sanitary Wardrobe Marketing Department, since last year, raw materials continued to rise, workers’ wages have been adjusting, rental prices have risen by 15%, production and operating costs have increased by 10%, and the rapid increase in costs has caused companies to suffer.

The rising production and operating costs of raw materials, in theory, will be paid by end consumers. However, due to sluggish market performance, most companies are afraid to shift the rising costs of upstream components such as raw materials and logistics to downstream distributors and consumers. Many companies stated that through the increase in the price of product terminals to solve the problem of increasing costs, the pressure on the customer groups of dealers, engineering, and retailers is even greater, coupled with fierce market competition and overcapacity, consumers are not buying, and the inventory is overstocked. A series of problems eventually led to the failure of timely return of investment funds. If the cash flow is not working well, there will be cassettes in the operation of the industry chain, so it is difficult to absorb the rising cost of the product terminal to absorb the rising cost.