“This is the largest price increase in sea freight that I have encountered in my 16 years in the industry,” Wei Xiaohua, head of the ICC Ceramics Export Department, told a reporter from China Ceramics Network. “It turns out that for a customer, the cheapest sea freight was about 600. The price rose to around US$4,500 in early October. In addition, at the beginning of 2020, a customer shipped goods with a sea freight of US$700 per container. In mid-September, he revealed that the current sea freight was US$5,600.”
At the same time, due to the rise in domestic raw material and fuel prices and the "dual control" of energy consumption, ceramic companies are facing increasing pressure on production costs. This year, the export unit price of ceramic tiles has shown an obvious upward trend. Wei Xiaohua revealed that this year's ceramic tile export unit prices "almost all have increased, and many in the circle of friends have official letters stamped by companies formally notifying customers of price increases."
In the past year, domestic ceramic exports have faced severe challenges due to factors such as the global epidemic, rising energy and raw material prices, and skyrocketing sea freight. During this process, domestic ceramic tile export brands have been transformed and upgraded. Some OEM and low-end volume companies have been eliminated in the fierce competition, and the industrial structure of the industry has been continuously adjusted.
Ceramic tile exports fell for four consecutive months
According to relevant customs statistics, from January to September 2021, my country's total ceramic tile exports were US$3.01 billion, a year-on-year increase of 5.44%. Among them, my country's ceramic tile exports in September were US$345 million, a decrease of 6.94% compared with US$370 million in the same period last year.
In terms of specific monthly export volume, it increased by 28.95% in January and 78.49% in February, but fell by 14.08% in March. Exports continued to grow in April and May, with an increase of 46.63% and 45.01% respectively. In May, they reached After purchasing US$382 million, exports fell for four consecutive months in June, July, August and September, by 9.68%, 20.83%, 9.35% and 6.94% respectively.
Regarding this data, some insiders engaged in foreign trade analyzed: The decline in exports is inseparable from the epidemic, especially the epidemic in Southeast Asian countries and regions. Since the beginning of this year, the number of ceramic tiles exported to the Philippines, Myanmar, Vietnam, Malaysia, and Singapore has decreased significantly compared with last year. Guan Jieting, deputy general manager of the Casadura ceramic tile brand, said, "Affected by the epidemic, many customers' projects have been suspended due to national mandatory blockade measures. Orders in Southeast Asia have almost stagnated since the first half of the year." It is reported that todaySince the beginning of this year, the epidemic has been raging in Vietnam, Malaysia, Cambodia and other Southeast Asian regions, and there have been many vicious counterattacks, resulting in the closure of many parks and shutdown of factories, which has caused serious economic losses.
Sea freight and production costs continue to rise
In terms of ceramic tile exports, soaring sea freight has also stopped many overseas customers.
Affected by the epidemic, shipping prices have continued to soar this year. In early August, the sea freight price from China/Southeast Asia to the east coast of North America exceeded US$20,000, a year-on-year increase of more than 500%. It is reported that global container prices experienced an unprecedented 28.1% increase in July, followed by an increase of 2.2% in August and 3.2% in September. The current freight rate has increased significantly by 91.5% compared with last year. According to reports, the rise in ocean freight rates was due to a larger-than-expected change in spot freight rates in the third quarter, an extended supply chain recovery period, a shortage of containers, and tight ship demand around the world.
Some ceramic foreign trade people pointed out that ceramic tiles are low-value and heavy goods. According to the current sea freight, the sea freight per square meter of some low-value ceramic tile categories has far exceeded the unit price of the ceramic tile itself. Xia Anli, manager of the export department of Luoman Enterprises, said that although shipping prices have been relatively stable in the past two months after some policy adjustments, they are still at a high level compared with previous price increases, which has led to a relative decrease in ceramic tile export orders.
At the same time, the "dual control" of domestic energy consumption and rising raw material and fuel prices have led to rising ceramic production costs. The profit margins of some small and medium-sized foreign trade companies have gradually been compressed and they are facing greater difficulties. It is understood that due to the substantial increase in production costs and increasing operating pressure, many ceramic companies have raised ceramic tile prices many times.
Xia Anli said, "On the whole, the export unit price of ceramic tiles has an upward trend this year, but the price increases of different companies and different product categories will be very different. For example, the price of slate products may be relatively high because of their relatively high value. Many companies will not choose to raise prices, but have to raise prices for some low-value, low-profit ceramic tile categories.”
Brand customers with different positioning also have different attitudes towards the price increase of ceramic tiles. Guan Jieting revealed, “Due to the increase in domestic raw material and energy prices, Casadura Ceramics will consider raising product prices in the near future. However, because Casadura’s brand positioning is mid-to-high-end and the product value is high, the challenge is to control it. Within the range. "However, some ceramic export managers said helplessly., in order to retain customers and ensure the normal operation of the brand, some export small brick categories did not increase prices even if their profits were severely squeezed, which is equivalent to selling at a loss.
Elimination and reshuffle, structural adjustment of ceramic tile export industry
A survey shows that in the past two years, the operating pressure of small and medium-sized foreign trade enterprises has been increasing, and many trading companies importing and exporting ceramic tiles have gone bankrupt. Many ceramic foreign traders said that under the influence of various factors, the domestic ceramic export industry is facing a large-scale reshuffle. Some ceramic tile manufacturers that rely on OEM OEMs for low-price exports will be eliminated one after another, forcing the transformation and upgrading of ceramic tile export brands. The industry The industrial structure is gradually adjusting.
"In the past two years, the epidemic and rising costs have had a great impact on small and medium-sized foreign trade companies. It is difficult for some low-end, low-value ceramic tile products to continue in the market." At the same time, foreign ceramic tile brands have lowered their prices, and China The absolute price advantage of exported ceramic tile products is almost non-existent. Under this situation, many ceramic tile export brands have begun to adjust their product structures, and some innovative and specialized products have an obvious upward trend.
Xia Anli said that the product structure of China's ceramic tile export enterprises has undergone great changes in recent years. In the past, ceramic tile brands that focused on volume and cost-effectiveness have gradually decreased. Many brands have begun to export high-value products such as large specifications and special features. Products and brand product structures are becoming more and more benign. According to reports, Roman Enterprise is a typical export brand that takes a differentiated route. The product characteristics of the ultra-white body give it an advantage in the export market, making competition more benign, and the company's export share ranks among the best.
Some ceramic tile export brands that are positioned as mid- to high-end also have certain advantages in this round of reshuffle. Wei Xiaohua revealed that due to its insistence on building a brand, ICC Ceramics' export orders have been affected in recent years, but it is just a fluctuating channel and there will not be no orders all the time.
Guan Jieting believes that the rising cost of ceramic production has a heavy blow to some companies that export low-end ceramic tiles, but it is beneficial to brands with mid-to-high-end positioning, and some low-end companies that are disrupting market competition and engaging in price wars will be benefited. Enterprises are eliminated, more brands are encouraged to innovate products and produce high-value products, and promote the industrial upgrading of the ceramic tile export industry.
(Author: Sitao)
