New crown pneumonia impacts the construction situation of the building materials industry in the next quarter

Under the strong leadership of the Party Central Committee and the State Council, the current epidemic prevention and control in my country has achieved important and periodic results, and the economic and social order has been rapidly restored. As the demand in the downstream market has started one after another, the resumption of construction materials enterprises has resumed. At present, the resumption rate of construction materials enterprises has basically returned to normal levels, but due to the relatively weak demand, the prices of construction materials products have experienced significant downward pressure. At the same time, due to the continuous impact of foreign epidemics, industries that account for a large proportion of the import and export trade of building materials, such as glass and ceramics, have been greatly affected. With the decline of domestic downstream related product exports, the market of glass and other industries has been "two-way squeezed." The industry's economic operating pressure has increased significantly.

In the first quarter, the output of the main products of building materials decreased significantly, but the decline was generally narrower than that from January to February. According to data from the National Bureau of Statistics, in the first quarter of this year, national output of cement above designated size was 300 million tons, a year-on-year decrease of 23.9%, a decrease of 5.6 percentage points from January to February; output of commercial concrete above designated size was 420 million cubic meters, a year-on-year decrease of 16.5% The decline rate was narrowed by 3.6 percentage points from January to February; the output of flat glass above designated size was 230 million weight cases, an increase of 1.9% year-on-year, and the growth rate slowed down by 0.4 percentage points from January to February. Among the other key monitoring products for building materials above designated size, except for the increase in output of fiberglass cloth and kaolin, the output of sanitary ceramics, bricks, tiles, marble and granite plates, and insulation and sound insulation products decreased by more than 20% year-on-year.

In February, affected by the prevention and control of the epidemic situation, the liquidity of building materials commodities weakened significantly and prices fluctuated slightly. Since March, the market order has been restored, but the demand is insufficient, and the prices of the main products of building materials have been loosened. In March, the ex-factory price index of my country's building materials and non-metallic mining industry was 114.56, a decrease of 1.3% month-on-month and an increase of 1.1% year-on-year. In the first quarter, the average price rose by 1.4% year-on-year, and the increase rate dropped significantly. Among the main industries of building materials, the decline of cement and flat glass is the most obvious. The ex-factory price index of the cement industry was 117.5, down 3.9% month-on-month, and the ex-factory price index of flat glass was 87.87, down 5.7% month-on-month. Other industries, except building ceramics, clay and gravel mining, non-metallic mining and building materials selection, and thermal insulation materials, all experienced a month-on-month decline.

Affected by factors such as the impact of the epidemic, weak market demand, a significant decline in product output and rising inventories, the economic efficiency indicators of the building materials industry have dropped significantly this year. According to data from the National Bureau of Statistics, the operating income of the building materials industry above designated size in the first quarter was 803.6 billion yuan, down 17.1% year-on-year, and the total profit was 46.2 billion yuan, down 31.4% year-on-year. Among them, the operating income of the above-scale cement industry decreased by 21.7% year-on-year, and the total profit decreased by 31.0% year-on-year; the operating income of the above-scale flat glass industry decreased by 18.6% year-on-year, and the total profit decreased by 69.8% year-on-year. In other building materials industries, except for the clay and sandstone mining industry, the operating income fell by more than 10% year-on-year.

Since 4.3, the resumption of production and production of building materials enterprises has accelerated.

According to the statistics of the China Building Materials Federation, as of the end of April, the resumption rate of construction materials enterprises above the national scale reached 99.6%, and the return rate of employees of construction materials enterprises above the designated size exceeded 93%, basically returning to normal levels in normal years. With the accelerated start of downstream key projects and the resumption of downstream infrastructure and real estate companies, the recovery rate of cement companies has steadily increased. As of the end of April, the resumption rate of the cement industry exceeded 98.0%, basically returning to the same level as in the normal year, and the current resumption rate of cement companies reached 70%.

5. The amount of imports and exports of building materials continued to decline, and the decline narrowed.

In the first quarter, my country's exports of building materials and non-metallic mineral commodities were US$6.52 billion, down 18.2% year-on-year. Among them, exports in March increased by 1.5% year-on-year, a decrease of 10.4 percentage points from January to February. Affected by the adjustment of the export structure of building materials and the impact of exchange rates, the offshore prices of building materials and non-mineral exports have continued to rise since this year, rising 6.6% year-on-year in the first quarter.

Affected by the rising exchange rate and insufficient domestic market demand, imports of building materials and non-mining minerals in the first quarter reached US$4.35 billion, a year-on-year decrease of 19.7%, a decrease of 0.8 percentage points from January to February. Among them, the import value in March decreased by 18.5% year-on-year.

1. The weak start of the domestic market is still a common problem faced by building materials companies.

In recent years, the power structure of my country's building materials industry is undergoing a marked transformation, and the industry's operation has entered a low- to medium-speed growth range. Since the beginning of this year, affected by the epidemic, the domestic and foreign market demand for building materials has declined further, and the follow-up momentum for the production of enterprises is still weak.

At present, the resumption of construction materials enterprises has basically reached a normal level, but the market demand is mainly focused on key projects. The start-up speed of non-key projects, real estate and other markets is still slower than that of construction materials enterprises. At the same time, it has been affected by the epidemic. The popularity of bidding has declined, and many established bidding projects have been delayed to varying degrees, which has a direct impact on the company’s established annual plan and performance goals. In addition, in March, due to the prevention and control of epidemic situation in grass-roots communities, villages, and office buildings, it was difficult for workers to enter, and the "last mile" of the decoration market has not yet been fully opened, resulting in lagging consumption. The building materials market as a whole is weak, resulting in insufficient power to resume production, higher inventories, lower prices and lower efficiency.

2. The international epidemic situation has led to a decline in the export of my country's building materials and related industries, and some industries are "two-way under pressure" in domestic and foreign markets.

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Since March, with the spread of foreign epidemics and the impact of factors such as shutdowns, logistics, and customs declarations, global trade has been severely affected. my country’s export trade volume has declined significantly, and the value of its exports to major trade bodies has fallen sharply. Although the export of building materials in March achieved growth in the same month, the export value of the building materials industry in the first quarter still fell by 18.2% year-on-year, and the export scale of major industries declined significantly. And the downstream products related to building materials, such as the decline in the export volume of my country's mobile phones, LCDs, and automobiles in the first quarter, have also affected domestic industrial production, which in turn affected upstream companies such as glass and fiberglass.

3. The operating environment is on the tight side, and the prices of building materials have a further downward trend.

In the first quarter, the sales profit margin of the building materials industry above designated size was 5.8%, a decrease of 1.2 percentage points from the same period of the previous year. The inventory of finished products increased by 21.1% year-on-year, and the accounts receivable increased by 26.7% year-on-year. The inventory turnover rate, current asset turnover rate, and accounts receivable The turnover ratio of models has dropped significantly, the operating environment of the industry has tightened, and the operating quality has been weak. Insufficient market demand has intensified competition among enterprises. With the accelerated recovery of cement and other industries, the ex-factory prices of building materials products are difficult to maintain stable and continue to decline. Some regions and some industries have already experienced cross-regional sales and price reductions.

Due to the impact of the epidemic, the resumption of production and production of the building materials company was delayed, and the weak market demand started, which further led to a series of problems such as poor sales, high inventory, product prices, serious capital pressure, and progress in capital flow. Increased production and operation pressure. In particular, small and medium-sized enterprises suffer from greater impact and impact due to their smaller scale of funds and weaker ability to withstand pressure, and they are faced with risks and pressures of interruption of capital flow to varying degrees.

In the first quarter, the operating income and total profit of new-type wall materials, technical glass, composite materials, non-metallic mineral products and other industries above the designated size dropped significantly. At the same time, the growth of downstream industries related to building materials was insufficient. In the first quarter, the new construction area and completed area of real estate in the country fell by 27.2% and 15.8% year-on-year, respectively, and sales of construction and decoration materials fell by 23.9% year-on-year. The output of products in emerging markets such as automobiles and electronics It has also declined to varying degrees. In general, except for key areas, the market momentum of emerging industries of building materials is insufficient.

6. The international epidemic affects the development process of my country's building materials "going global".

Affected by the new Coronary Pneumonia epidemic, most countries have implemented stricter inspections and quarantines on international flights and cargo imports and exports. Cargo transportation has been blocked, personnel restrictions and poor customs clearance have led to limited international cooperation and exchanges, and international market development. Suffered greatly.

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At the same time, enterprises generally report that human resources are insufficient for international engineering and foreign investment projects, and the equipment, materials, and spare parts required for engineering construction cannot reach the site on schedule, which affects the normal construction of engineering projects and factory operations. In some countries, due to the global spread of the epidemic, the upgrading of epidemic prevention measures and even the closure of the country’s management, companies’ overseas investment projects have fallen into shutdown and production, which has affected the original intention of enterprises to invest overseas to build factories to expand foreign trade and expand market share. Will have a greater impact.

3. Preliminary research on the economic operation situation of the building materials industry in the first half of the year

At present, most of the key projects have been resumed, and governments at all levels are promoting the start of a wider market demand. However, the spread of the international epidemic will have a greater impact on my country's foreign trade in building materials, especially ceramics, stone and other industries that rely heavily on foreign trade, and become the largest uncertain factor affecting the economic operation of the building materials industry.

Combined with the current epidemic situation at home and abroad, comprehensive consideration of China's policies, market and other comprehensive factors, if infrastructure investment and real estate are accelerated, the demand is effectively transmitted to the building materials industry, the consumer market is restored in an orderly manner, and the local government safeguards are in place, the second quarter and the second half of the year Strengthen macro-control, further play the supporting role of investment, and effectively promote consumption. The impact of the epidemic in the first half of the year will be alleviated. The operating income of the building materials industry above designated size will be the same or slightly lower than the previous year. The overall impact will be basically controllable throughout the year. The operation will show a trend of "before the low and then high". The operating income of the industries above designated size for the whole year is expected to increase by 4% to 5%. If it is difficult for engineering projects and consumer demand to be released quickly and fully, then the industry's operating income may still decline throughout the year due to constraints such as production capacity and project execution progress.

Fourth, continue to promote the acceleration of the resumption of production and related opinions and suggestions

Insufficient demand is a common problem faced by current building materials companies. It is recommended to further fully implement the requirements of the State Council's "Notice on Effectively Strengthening the Scientific Prevention and Control of Epidemic Diseases in an Orderly manner and Do a Good Job in Resuming Production and Resuming Production of Enterprises" and the spirit of the relevant conferences. The special control of civil engineering, real estate and other markets promotes the resumption of production. At the same time, we will implement measures in accordance with local conditions, scientifically carry out epidemic management, strengthen publicity and guidance, boost social confidence, actively promote the resumption of shopping malls, promote decoration companies to enter communities and villages, and effectively open up the "last mile" of consumption.

In the first quarter of this year, the prices of main building materials products continued to decline, but with the market fully launched, the downward trend in building materials products prices will be further contained, and under the influence of changes in the prices of production and living factors, industrial policies, and changes in supply and demand in regional markets, building materials products The price may fluctuate in a certain area or in a certain period of time. We must strengthen the monitoring of price fluctuations in key industries and make necessary adjustments and regulations. At the same time, we should also do a good job in monitoring and supervising the prices of building materials products, especially cement and other overcapacity industries in the case of insufficient demand, by appropriately guiding cement and other overcapacity industries to orderly and compliantly develop their production capacity, and prevent the market caused by oversupply. Competition intensifies, and even disorderly competition. To ensure stable fluctuations in the prices of building materials products and stable operation of the industry.

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3. Effectively implement the support policy and increase support for SMEs in a targeted manner.

It is recommended to effectively implement the relevant support policies issued by the various departments and regional governments to increase the convenience of business operations. Through a series of measures such as the reduction of administrative fees, the periodic delay of social security funds, the acceleration of export tax rebates, and the extension of high-speed free periods, etc. Business pressure. Increase the special support for small and medium-sized enterprises, accelerate the implementation of preferential policies such as differential lending and interest reduction to support their production recovery, bridge funds, etc., and ease the pressure on enterprises' capital needs, so as to promote SMEs to achieve normal production and operation activities faster.

It is recommended that on the premise of good epidemic prevention and control, on the one hand, by optimizing customs clearance, improving trade efficiency, and further improving China's export commodity list management system, for products with strong international competitiveness, by increasing export tax rebates and other means Encourage and support exports, give full play to the advantages of China's epidemic prevention and control to achieve the first results, and further expand the international market. On the other hand, we must increase support for our own industries and strive to improve the core competitiveness of the industry. In industries such as building sanitary ceramics and glass fiberglass, which have already enjoyed comparative advantages in the world, we will increase our efforts in brand building, market application, and independence. Intellectual property rights and technology R&D support efforts to seize the international high-end market.

5. Overall advance industrial structure adjustment, accelerate the cultivation of new markets and expand new areas.

At present, the building materials industry is still in a crucial period of power conversion and industrial structure adjustment. From the perspective of the long-term development of the industry, it is still necessary to accelerate the cultivation of new markets and expand new areas. One is to actively promote the development of traditional industries such as cement through the extension of the industrial chain to form a joint development model, encourage cement companies to transform into environmental protection industries such as co-processing of cement kilns, and integrate the building materials industry into the social cycle, while coordinating glass, glass fiber products, and building health Industrial structure adjustments such as ceramics and new wall materials will guide it to diversify towards energy conservation, intelligence, functionality, and high-end, and adapt to or guide changes in related consumer fields; second, through measures such as raising mandatory standards and encouraging government procurement For example, it is mandatory to promote the application of low-emission coated glass and other green energy-saving building materials in construction to accelerate the guidance and cultivation of the consumer market, promote the upgrade of the consumer market, and stimulate the potential of the consumer market.

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