Analysis of Economic Operation of Abrasives Industry in the First Half of 2015

Abstract China's GDP growth rate in the first half of the year was 7%, which fully reflected the trend of slowing down the national economy and stabilizing the country. Due to the current lack of statistical data, the abrasives industry can understand the situation of major companies and the existing statistics can be roughly analyzed. The overall trend is affected by the market...
China's GDP growth rate in the first half of the year was 7%, which fully reflected the trend of slowing down the national economy and stabilizing the country. Due to the current incomplete statistics of the abrasives industry, the analysis of the situation of major enterprises and the existing statistical data can be roughly analyzed. The overall trend is affected by the sluggish market demand, and the output declines. Due to the serious overcapacity, the supply exceeds demand, the price Intense competition, falling product prices, falling profits, and poor circulation of funds have made many companies difficult to operate. Enterprises above designated size are running smoothly, small enterprises are under greater impact, production and sales are falling by a large margin, and the industry is in a period of significant adjustment.

I. Characteristics of industry operation in the first half of the year

1. The amount of abrasive and the price drop. In the first half of the year, the output of brown corundum was about 770,000 tons, down 14.44% year-on-year. The output of white corundum was about 150,000 tons, down 9.09% year-on-year. The output of black silicon carbide was 256,000 tons, down 14.67% year-on-year. Green silicon carbide was about 62,000 tons. The decline was 31.11%.
Price (factory fare)
Brown corundum block: 3000-3150 yuan / T; section sand: 3700-3800 yuan / T; particle size sand: 4400-4500 yuan / T.
White corundum block: 4000-4100 yuan / T; section sand: 4700-4800 yuan / T; particle size sand: 5100-5200 yuan / T.
Black silicon carbide 98% block: 5000-5100 yuan / T; 5400-5500 yuan / T (petroleum coke); sand (16-100 #): 5500-5600 yuan / T; 88% (0-10mm): 4000- 4100 yuan / T.
Green silicon carbide 98.5% block: 6400-6500 yuan / T; particle size sand (F24-60): 8600-8700 yuan / T; JIS1200 yuan / T; JIS 1500 yuan / T.
Both year-on-year decrease, the actual transaction price has also fallen.

2. The output of ceramic grinding tools is about 100,000 tons, which is flat year-on-year. Statistics from several major factories show that prices have increased slightly year-on-year.
The output of resin abrasives was about 263,000 tons, up 5.24% year-on-year. The price dropped and the profit dropped year-on-year.

3. Import and export trade (January-June)

Export: Exports of major products of the industry
Imports: Abrasive imports decreased by a large margin year-on-year. The amount of silicon carbide increased by 30.83%, the average price increased by 87.27%, and the rest decreased.
The import volume of abrasives increased by 16.74%, the amount decreased by 6.07%, and the average price of ceramic resin and oil stone was decreasing.

4. The transformation and upgrading of equipment , the enterprises with strength in the industry are already in progress, and some R&D institutions are already conducting research and development on energy-saving and environmental protection equipment and improving the automation level of abrasive manufacturing. The combination of production, study and research is accelerating, and the development of new products is already underway.

Second, the current difficulties and problems in the abrasives industry 1. The steel industry, which has the largest demand for products in the abrasives industry, has been in recession. The crude steel output has declined for the first time in 20 years. The national crude steel output is 410 million tons, down 1.3% year-on-year. %, global crude steel output was 813 million tons, down 2% year-on-year.
Building materials: cement output was 107.714 million tons, down 5.3% year-on-year; flat glass output was 395.78 million weight boxes, down 4.2% year-on-year; automobile growth was 2.64%, a year-on-year increase of 7 percentage points;
Shipbuilding completions increased by 6.3%, but new orders received a 72.6% decline. The decline in production of related industries has led to a decline in market purchases;
2. The recovery of funds is difficult. The market is sluggish, which makes it difficult to recover funds in the sales chain;
3. SMEs have difficulty in lending, and high-interest loans from private lending institutions have increased financial costs;
4. Long-term low-price competition has greatly affected the market environment and the innovation and development of enterprises.
Under the current situation of severe overcapacity in the industry and low market demand, some enterprises use low-priced sales to hit the market. From the perspective of domestic and foreign sales prices, the price of abrasives has been declining. The profit rate of the company has been falling.
On the other hand, some enterprises are meticulous in product refinement, not only the output does not fall, but the price is also relatively stable.
We have enacted anti-unfair competition conventions, and some companies have reduced costs and adjusted the structure to understand. However, some brown corundum enterprises invoiced the sand price of 3150-3200 yuan / T is not normal;
5. The homogenization of products is serious, which has intensified the low-price competition in the market, and also highlights the problem of insufficient innovation capability of enterprises.

Third, the trend of the second half of the year
<br> Premier Li Keqiang's goal for the economic development in the second half of the year is the growth of GDP of 7%, which is also the medium and high-speed growth standard identified by the central government. China's economic development shows speed change, structural optimization, and power conversion. Features. It has become a consensus that economic development has entered a new normal. The slowdown in economic growth will inevitably have an impact on us. According to the analysis of the steel industry trend of the Iron and Steel Association, after the peak crude oil output in China reached its peak in 2014, it will show a downward trend after a certain period of fluctuation in the vicinity of the peak.

We must take the initiative to adapt to the new situation, we must wait and take the initiative to innovate.
Work that should be focused on and strengthened in the second half of the year:
1. Reduce and increase efficiency and stabilize the market <br> The current overcapacity is the source of low-price competition and market instability. We must determine the output according to market demand, but not blind production. Enterprises can transfer excess capacity, move out or change their way, and stop competing at low prices. This will not only be bad for themselves, but also destroy the entire industry. We encourage industry self-discipline to sign agreements, but some companies always want others to be self-disciplined, and leave room for self-discipline;
2. According to the targets listed in "Made in China 2025", accelerate the transformation from production-oriented enterprises to production-oriented enterprises . Enterprises should now transform the existing marketing model, make full use of the Internet + marketing model , and customize according to customer application needs;
3. Intensify research and development efforts, take high-end routes , and have strong enterprises. They should plan their own markets, get out of the low-end market competition, and gradually occupy the high-end market;
4. Paying attention to the brand building , continuously improving the technical content of products, and shifting from OEM production to independent brands, so that their brands are screaming and standing in the domestic and foreign markets, and truly transforming Chinese manufacturing into China;
5. Strengthening environmental protection and realizing green production <br> Environmental protection work is getting tighter and tighter. Recently, the Ministry of Environmental Protection has interviewed cities that are not up to the standard, and the provinces and municipalities have interviewed regional and unit leaders who are not up to the standard of environmental protection, and the deadline is up to standard. Many enterprises in our industry still have not received enough attention. The smelting and processing is not on the dust-removing equipment, and the production conditions are not good. This does not meet the requirements of green production. After this work is strengthened, a group of enterprises will close. We must fully understand the importance of strengthening environmental protection and must not be lucky.

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