Since 2021, “price increases” have become the norm for ceramic manufacturers and upstream companies.
“Raw material prices remain high, with some raw materials rising by more than 30% at one time.” “Natural gas prices have skyrocketed, with prices in some production areas approaching 5 yuan/m³.” “Carton prices have risen three consecutive times, up 25% year-on-year. "Above"... The prices of ceramic raw materials, glazes, fuels, packaging, etc., which are closely related to ceramic production, continue to increase, and the production pressure of ceramic manufacturers has increased in vain. In order to alleviate the pressure caused by the continued rise in production costs, many ceramic manufacturers can only adjust the price of ceramic tiles, choosing to use price increases to cope with production difficulties.
On the other hand, ceramic tile dealers are also facing the dilemma of rising operating costs and gradually compressed profit margins.
01
Prices of ceramic raw materials and other materials have been rising
Price increases have become the norm in the ceramic industry since 2021
Since February this year, domestic raw material prices have continued to rise, and there were even supply shortages and queues to get goods. At the same time, prices of coal, natural gas, colored glazes, etc. related to ceramic production have also been rising one after another, attracting widespread attention and hot discussion in the industry.
In this regard, CCTV-2's "Zhengdian Finance" column has reported twice, pointing out that "since the beginning of this year, the price of raw materials has soared, and various chemical raw materials, steel, cartons, etc. that are closely related to ceramic production have also risen sharply. Some materials The price has even reached a record high, and the substantial increase in production costs has forced many ceramic companies to successively increase the prices of some ceramic tile products."
"Ceramic Information" also reported that since February this year, zinc oxide, caustic soda, cartons, pigments, frit, cobalt oxide, strontium carbonate, LNG, coal, electricity, etc. have experienced price surges and limited time limits. Supply, severe scarcity and other conditions have caused the cost of ceramic production to skyrocket. Ceramic companies in various production areas across the country have issued notices of price increases for ceramic tiles. The price increases have been "wave after wave". Many ceramic production areas such as Guangdong, Guangxi, Jiangxi, Fujian, Hebei, Hubei, Zhejiang, Henan, Anhui, and Jiangsu have " No one is spared." Some ceramic companies have reduced production and suspended kilns, saying "this year is too difficult"...
It is understood that due to the substantial increase in production costs and increased operating pressure, many ceramic companies have raised ceramic tile prices many times. Since this year, porcelain tiles,The prices of ceramic tile categories such as antique bricks, medium boards, and tiles are constantly rising. The specifications of price-increasing ceramic tiles include 400×400mm, 600×600mm, 800×800mm, 300×600mm, and 400×800mm. The price increase range is between 0.1 and 1 yuan/ piece. Some ceramic companies said, "Although the price increase each time is not high, from the end of last year to now, the cumulative increase in ceramic tiles of some specifications has exceeded 10%."
A "price increase" for ceramic tiles from ceramic companies in August (Source: "Ceramic Information")
At present, under the background of "double carbon" and tight power supply, all ceramic production areas across the country are facing the dilemma of power cuts and production suspensions, and production and operation costs will also continue to rise. Under the influence of this factor, some ceramic companies are expected to increase the price of ceramic tiles in the future.
02
Rising rent and labor costs
Tile dealers face survival problems
Ceramic companies have raised ceramic tile prices, and dealers are under the greatest pressure. In addition to rising purchase prices, ceramic tile dealers have also faced survival pressure from substantial increases in operating costs such as store rentals and manpower investment since this year. After the epidemic, physical business has suffered a heavy blow, and stores are empty. For ceramic tile dealers who have already suffered a sharp decline in store retail due to the diversion of fine decoration, home decoration and other channels, it is even worse. In recent years, the phenomenon of continuous rent increases in home building materials stores continues to appear.
On September 9, the national ceramic tile and sanitary ware market research team of China Ceramics Network's "Tao Xing China" visited local home building materials stores again after two years and learned about the difficulties faced by local ceramic tile dealers.
The investigation team learned that compared with 2019, the rents of most home building materials stores in Fuzhou have increased significantly. Taking the Fuzhou Xiyingmen headquarters store as an example, its rent increased by 60% year-on-year in 2019, and has now reached 280 yuan/㎡/month. The payment is collected every two years. Some dealers bluntly said that the high rent of the store has seriously affected the store. Tenant survival. While rents are high, store operating costs are also increasing at an annual rate of 15%, with the increase in labor costs tending to exceed the rental growth rate. (For details, see "Rents are rising, labor costs are rising, but product prices dare not rise | Tao Xing China·Fuzhou Station·Personal Views (Part 1)》)One article)
Since the beginning of this year, incidents of dissatisfaction and collective protests among merchants due to rent increases at home and building materials stores have occurred from time to time. Xi'an Daming Palace's "unauthorized rent increase within the same period" caused conflicts. Zhangye Red Star Macalline merchants were dissatisfied with the rent increase and closed their stores in protest. Hubei Chibi Red Star Macalline merchants went out of business collectively to protest against the rent increase... Home and building materials stores will operate through rent increases. The pressure has shifted to the merchants. The merchants are forced to survive and the conflicts with the stores have become more and more intense and are about to break out.
03
The gross profit margin of ceramic companies has declined year after year
Profit margins for ceramic tile dealers are gradually compressed
In recent years, as the cost of ceramic production and operation has increased, the gross profit margin of ceramic companies has declined year after year. Both the overall gross profit margin of the company and the gross profit margin of detailed product categories have declined significantly.
Mona Lisa's average gross profit margin for the manufacturing of architectural ceramic products in 2020 was 34.68%, a decrease of 3.79% compared with the same period last year. The gross profit margins of various product categories and regions showed a downward trend.
Dongpeng's ceramic tile gross profit margin in 2020 was 34.29%, and its gross profit margin fell by 4.2% compared with the same period last year. In addition, Dongpeng's gross profit margins from 2017 to 2020 were 37.21%, 34.73%, 35.69%, and 32.42% respectively. There was a slight increase during the period, but the overall trend was also downward.
The gross profit margin of ceramic tiles of Diou Home (the parent company of Oceano) in 2020 was 30.17%, a decrease of 6.03% from the same period last year.
The gross profit margin of Yuexin Health (the parent company of SMIC) in 2020 was 25.28%, a decrease of 6.72% from the same period last year. The gross profit margin of each ceramic tile category declined to varying degrees. The largest decline was in porcelain tiles, which was 6.72% lower than the same period last year. It fell 10.3% over the same period.
In this regard, some ceramic companies pointed out that as costs continue to rise and relevant costs cannot be transferred downstream in a timely manner, the profitability of ceramic companies will face the risk of further decline.
Same asAt this time, terminal ceramic tile dealers are also facing rising operating costs and gradually compressed profit margins. In the national ceramic tile sanitary ware market survey of China Ceramics Network's "Tao Xing China", many dealers interviewed said that "the profits of making ceramic tiles are different from the past, and the decline is very serious." 300×600mm, 800×800mm, 900×900mm Even the profit margins of 600×1200mm ceramic tiles are very small, but dealers dare not raise their prices for fear of losing the small market. In the Shenzhen ceramic tile market, most dealers will mainly promote 750×1500mm and 900×1800mm ceramic tiles to consumers. In addition to the good decoration effect, the biggest reason is that there is profit margin.
(Author: Sitao)
