Since the beginning of September, Gaoan centralized gas supply has experienced three consecutive increases, with the equivalent coal price breaking 2,000 yuan/ton again. Coupled with the continued rise in coal prices and raw material prices in many places, many ceramic companies have clearly felt the skyrocketing costs. The pressure brought by it was said that they could no longer bear it, and they announced to increase product prices one after another.
Gaoan gas prices rise for three consecutive years
Profit margins of ceramic companies have been compressed
Jimin Credible (Gaoan) Clean Energy Co., Ltd.'s "Notice on the Release of Clean Industrial Gas Supply Prices from October 1 to 15, 2022" shows that the latest gas price from 0:00 on October 1 is 0.683 yuan /Nm³. The person in charge of a ceramic enterprise in Gao'an Ceramics Park said that the latest gas price is equivalent to the coal price of 2,055 yuan/ton. If we take the 800×800mm and 400×800mm specifications as an example, the production costs of high-tech ceramic enterprises in October will be 2 yuan/㎡ and 1.2 yuan/㎡ respectively higher than in September.
It is understood that this is the third price increase by the gas company within this month. The first price increase was on September 1, when the price of natural gas supplied to enterprises in the park was adjusted to 0.634 yuan/Nm³, equivalent to a coal price of over 1,900 yuan/ton; on September 16, the gas supply price was raised again to 0.65 yuan/Nm³. The cumulative increase in the three price adjustments was approximately 7.7%. The gas price in Guangdong production areas also remains high. In September, the gas price in Qingyuan production area exceeded 5 yuan, equivalent to a coal price of 3,000 yuan/ton; the gas price in other surrounding production areas was about 4 yuan, equivalent to a coal price of about 2,600 yuan/ton. ton.
Official data shows that from early January to mid-September 2022, the average price of liquefied natural gas (LNG) in the national circulation field was 6864.22 yuan/ton, equivalent to about 4.90 yuan/m³, an increase of 38.11% compared with 2021.
In addition, coal prices have been volatile recently. In late September, a Jiangxi ceramics enterprise stated that "the price of coal arriving at the factory is close to 1,700 yuan/ton, and the increase is still relatively obvious." Monitoring data from the Important Production Materials Monitoring System of the Ministry of Commerce of Fujian Province show that from August 29, 2022 to September 2022The average coal market price of sample companies monitored on the 4th was 1,509.44 yuan/ton, an increase of 0.3% month-on-month. Among them, the market price of anthracite coal was 1,278.33 yuan/ton, a month-on-month increase of 0.6%; the bituminous coal market price was 1,625.00 yuan/ton, a month-on-month increase of 0.2%. Overall, the coal market prices of the monitored sample enterprises in Fujian Province increased within a narrow range.
The market monitoring system for important production materials in Guangdong Province shows that from September 19 to September 25, the average price of coal in Guangdong Province was 1,529.5 yuan/ton, an increase of 7.8% month-on-month. As downstream coal plants are currently affected by the tight supply of raw coal, coal inventories continue to decline, and procurement and replenishment are active. In addition, due to the continuous rise in coal prices in origin, manufacturers have declined in their willingness to increase production, resulting in a slight increase in coal prices. It is expected that coal market prices in Guangdong Province will fluctuate slightly in the future.
Many industry insiders believe that the “short supply” of coal is affected by both domestic and foreign factors. On the one hand, the "Golden Nine and Silver Ten" period is originally the peak season for orders in the chemical industry, building materials and other industries. Combined with the summer peak shift and delayed production, companies have insufficient inventory, resulting in a rapid expansion of demand for fuel coal. On the other hand, the surge in overseas energy prices has caused Europe, Japan, South Korea and other places to scale back energy-intensive industries. The increase in domestic demand for alternative products has led to an increase in demand for raw coal, thus driving up the price of coal. With the coming of the heating season in the north, coal prices are expected to rise, which will further increase the production pressure on ceramic enterprises.
The wave of price increases swept across Jiangxi, Shandong, Hunan and other production areas< /span>
Faced by rising prices of natural gas and coal, many ceramic companies have successively announced increases in product prices in order to reduce production pressure. On September 4, Kangerju Ceramics, one of the large-capacity small floor tile production companies in the Pan-Gao'an production area, issued a price adjustment notice and decided to increase prices for 300×300mm and 400×400mm products by 0.1 yuan and 0.2 yuan respectively from September 10. More than eight ceramic companies in Shandong announced price increases. The price-increased products are mainly 300×600mm, 400×800mm and other specifications of porcelain tiles, 800×800mm glazed tiles and other products. Many Hubei ceramic companies have also joined the price increase, with product increases ranging from 0.1 to 2 yuan per piece. The products mainly involved are 750×1500mm soft light tiles, 750×1500mm bright tiles, etc.
In the production cost of ceramic tiles, fuel costs composed of coal and natural gas account for more than 25%. Therefore, the increase in fuel prices has a great impact on the normal operations of ceramic enterprises. In addition to being affected by the rising prices of natural gas, coal, raw materials, etc., ceramic companies in Shandong, Hubei, Guangxi and other places also pointed out various factors such as power cuts, glaze prices, and continued sharp increases in cartons, chemical products, and shipping costs.
This large-scale price increase is not the first price increase in the building ceramics industry this year. Zhongtaojun stated in "Ceramic enterprises have set off 7 waves of price increases this year!" Are ceramic tile terminal prices getting lower and lower? 》It is mentioned that up to now, the building ceramics industry has experienced seven rounds of price increases.
The cost of raw materials is gradually increasing, coupled with factors such as rising coal and natural gas prices. In order to transfer costs, ceramic companies can only choose to increase prices. If downstream demand cannot be boosted, they will just rely on costs to drive price increases and production capacity. The utilization rate has not increased effectively, which will pave the way for more intense competition in the industry in the future.
Under this huge operating pressure, more and more ceramic companies have either gone bankrupt or switched production to find a way out. Taking Jiangxi production areas as an example, this year has set off a boom in switching to lithium battery production. Nearly 40 ceramic tile production lines have switched to lithium battery production, with an annual production capacity of nearly 260 million square meters of ceramic tiles. There are also many ceramic companies interested in switching to lithium battery production.
Price increase letters are everywhere
Terminal prices are difficult to synchronize
Although there are currently many price increase letters from various production areas, the terminal price has not yet "raised in place". With the arrival of the decoration peak season, terminal stores of various ceramic tile brands have successively launched various promotional activities, such as "Buy big bricks and get small bricks free", "Buy one get one free", "0 yuan flash sale", "42% off for the entire site" and "Second piece" Half price" etc. Many leading brands have also "lowered their prices" and entered into a "price war". Zhongtaojun noticed that in a special promotion of a leading brand, 800×800mm tiles only cost 39 yuan/piece, and 750×1500mm tiles only cost 98 yuan/piece... In order to grab customer traffic, all ceramic tile stores have resorted to Special skills.
In addition, many accounts have emerged on online platforms such as Douyin to reveal the ex-factory price of Foshan ceramic tiles. Although the prices are not uniform, they are much lower than consumers expected, and this also makes them feel At the end of the day, I am more determined to find Foshan bricks with lower prices and good quality. At the same time, as market demand shrinks and people begin to tighten their "money bags," low-priced ceramic tiles can attract more consumers' attention. Forced by helplessness, even if ceramic tile dealers are facing huge cost pressure, they can only carry out crazy promotion activities and reduce ceramic tile prices, just to attract customer traffic and increase order volume. A ceramic tile dealer revealed that the current terminal price is not the lowest but only lower. In order to get more orders, they have to follow the price reductions of other stores, even though they know it is a loss-making business.
On the one hand, the rising prices of production materials such as energy and raw materials have led to the continuous increase in production and operating costs. On the other hand, the terminal prices of ceramic tiles have continued to decline. The profit margins of ceramic companies have been greatly compressed, coupled with the downward pressure on the economy, overcapacity and other disadvantages. Factors have further intensified competition in the construction and ceramics industry. It is often difficult for ceramics companies to obtain large profits through a single business. Blind price wars will only accelerate their own destruction. Therefore, many ceramic companies have begun to seek diversified development and expand emerging businesses to seek new profit growth points.
