Grinding the market in the first half of the year

Since the global economy began to enter the recovery recovery channel in the fourth quarter of 2009, many people in the industry are very optimistic about the grinding market in 2010. Entering July, and recalling that half a year has gone through the grinding market in 2010, the prices of abrasives have been rising all the way to the top. For the relatively stable price of the abrasives market, this wave of rising prices is indeed a rare phenomenon, driven by rising raw material prices. There is no doubt. According to experts from China's phenolic resin network, however, there are different opinions about the grinding market in the second half of the year. Some people in the industry are concerned that prices are too high and will curb demand in the end market, causing customers to have a heightened fear. Optimists believe that rigid market demand will still exist, cost-boosting will continue to exert force in the second half of the year, and the market will not be able to rise in the short term. reverse. In terms of the abrasive market in the first half of the year, due to the fact that the industry has just emerged from the bottom of the economic crisis at the beginning of the year, some small abrasive producers have not yet ended their “hibernation” and large-scale enterprises have not fully started production with full horsepower. The entire abrasive smelting industry operating rate is less than 50%. The tight supply situation caused the abrasive market to continue its crisis. At the same time, with the recovery of downstream market demand, it laid the foundation for the market price rebound. In November last year, the national electricity price was raised overall. Although the rates varied, the overall cost was greatly increased, coupled with market rumors of price increases and resource tax adjustments. Abrasive market has the subjective and objective conditions of price increase. By the end of June, the invoice price of some corrugated alumina manufacturers could be 4,600 yuan/ton, which was 500 yuan/ton more than that at the beginning of the year; the current billing price of white corundum sand was now available. Has exceeded 5,000 yuan / ton. Due to the increase in production costs, the price of granular sand in early April has remained high, and the mainstream price of F16-90# pickling sand is 7900 to 8,000 yuan/ton.

In addition, the bonded abrasives bonded abrasive market, coated abrasives in addition to abrasives, raw materials, paper base, cloth base, bonding agent prices have also increased significantly; there is "China coated abrasives township" title Tongshan County, Hubei Province In the first half of this year, the production and sales boomed, and the coated abrasive industry made innovations in technology and technology, increased product quality, adjusted the market structure, revived business models, and accelerated the seizure of European and American markets. According to the experts of China phenolic resin network, Baota Sanding Cloth Factory improved the technological process and improved product quality, and the benefit was 6 times higher than the same period of last year. Bonded abrasives In addition to abrasives, resins, glass, rubber, and other binders have all increased in price. The current price of resin cuts is about 10% higher than that at the beginning of the year. The export market is picking up – With the global economy picking up this year, the demand for abrasives in foreign markets has also increased significantly. From the website of the Ministry of Commerce, it was learned that from January to May in Dalian, the amount of exports of silicon carbide in general trade increased by 280% and 473% respectively year-on-year. Similarly, in the first quarter of this year, the export volume of silicon carbide in the province of Henan was 7960.62 tons, an increase of 85.75% year-on-year; the amount was 1,679.12 US dollars, an increase of 144.98% year-on-year. As Liu Ruiying, manager of foreign trade department of Zhejiang Bluebird Abrasives Co., Ltd. put it, "This year's domestic and international markets are all good. Although the price rises so much, foreign customers can accept it." Fan Renpo, general manager of Henan Yilong Investment (Group) Co., Ltd., who has been engaged in abrasive export trade for a long time, told us: “The foreign trade business in the first half of this year was not bad. The company originally planned to return this year’s export ratio to 60%. In the first half of this year, it has basically recovered to about 40%. The rigid demand for abrasives is still in the international market."

Demand, cost dual power to promote abrasive abrasive prices. China phenolic resin network experts said that the market supply and demand level since 2010, with the rapid improvement of China's economic situation, once the domestic machinery and equipment, mechanical and electrical, metal products, wood and stone grinding industry has improved significantly in the end market, subject to The demand for grinding tools in China is also rapidly released, which in turn increases the demand for abrasives. However, with the recovery of downstream market demand, most of the small abrasive production enterprises have not yet emerged from the “winter season”, and domestic large-scale abrasive manufacturers have also made development adjustments in response to the market's unclear demand, and only opened some smelting equipment. The start-up rate of the entire abrasive industry at the beginning of the year was less than 50%. After the New Year, the market is recovering rapidly and the export prospects are promising. However, China’s southwest and northwest regions suffered severe drought once in several decades, and the supply of electricity and water could not be followed up for a while. However, Northwest Yunnan, Yunnan, Yunnan, Northwest China, Qinghai, and Gansu Province are important areas for the production of silicon carbide corundum in China, and many abrasive companies Tight supply is basically in the state of production stoppage and semi-discontinuation. In this case, the abrasive market supply is tight, and some companies only supply old customers. New customers will not be able to order goods even if they first play. However, at present, with the normal supply of electricity, abrasive companies around the world have also started production at full capacity. Currently, the overall operating rate of the abrasive industry has recovered to more than 90%. Overcapacity and excessive price losses have lost the international market price advantage and the industry is facing new problems.

Starting from the end of 2009 at the production cost level, China’s economy has experienced rapid recovery. At the same time, economic inflation pressures have risen again. The CPI has continued to climb year after month and prices have risen. Under such circumstances, with the increase in the prices of various raw material resource products, the production costs of abrasives and abrasives enterprises have also greatly increased. Speaking of the increase in the production cost of abrasives, Mr. Fan Renpo, general manager of Henan Yilong Investment (Group) Co., Ltd. calculated for us an account: “After years, the prices of various raw materials needed for smelting corundum have basically risen. 60 yuan, iron filings rose by 200 yuan per ton, the price of electricity rose by about 0.18 yuan per degree, coupled with coal prices, considering the cost of smelting smelting about corundum increased by more than 600 yuan." In addition, for the coated abrasive industry, the director of Jiangsu Mitsubishi Materials Co., Ltd. said that due to the reduction in the cotton planting area in China's cotton production area in Xinjiang last year by 30%, coupled with natural disasters, this year's domestic cotton supply is very tight, resulting in The price of cotton has risen steadily, ordinary cotton cloth has risen to 8 yuan/meter, and the cumulative increase has approached 60%, and the quality is still not very good. Its use of high-grade paper products is mostly imported from abroad. Since the beginning of this year, the international pulp price has steadily increased. Afterwards, due to the massive earthquake in Chile, Arauco CMPC's two world-class pulp mills have been greatly affected, and there have been ** incidents in Finland, resulting in a 90% reduction in the volume of pulp exports from the Nordic countries, resulting in pulp supply in the international market. Very nervous. In late March, the data showed that the bleached softwood Kraft pulp in the European market was quoted at US$888.77 per ton, which was a month-on-month increase of 0.56%. US newsprint was quoted at US$545.92/tonne-581.81 US$/ton, or between 0.75% and US hardwood. Kraft pulp is quoted at 5,278.28 yuan per ton, which is an increase of 2.55% per ton week. Although the Chilean paper mill has gradually resumed production, the Finnish ** incident has ended, and there is little room for rising pulp prices. However, due to the support of China's market demand and the gradual stabilization of European and US demand, the international pulp price does not have significant downside. Pulp market prices will remain high and volatile.

The market's psychological expectations are good. According to the experts of China phenolic resin network, since the prices of various raw materials and resource products have risen rapidly since the beginning of the year, and at the beginning of the year, representatives of the “**” proposed a proposal for resource tax adjustment, and the main raw material bauxite was used for the production of abrasives, and The bauxite country controls important resources for exploitation and export. For a time, the market began to impose rumors on the taxation of bauxite resources, and some companies even prepared for the storage of bauxite. At the same time, in the first half of the year, as the drought conditions in southern China continued to increase, China’s power supply was very tight. Coupled with the rise in coal prices, power generation companies were on the verge of losses, and several domestic power generation companies began to request simultaneous price increases. Moreover, in order to accomplish the energy saving and emission reduction target during the “Eleventh Five-Year Plan”, Premier Wen Jiabao stressed at the executive meeting of the State Council on April 28 that strict high-power pricing policies should be implemented for high-energy-consuming industries. As we all know, the cost of electricity used for abrasive production accounts for about 50% of the total cost. With the step-by-step pressurization of electricity prices, it provides sufficient reason for the abrasive producers to increase their prices. Most companies are bullish about late-stage abrasives. In short, as resource tax adjustments and adjustment of electricity prices are expected to continue to be strengthened, it is also expected that abrasive companies will increase their price-wise mentality. The grinding market in the second half of the year is worth paying attention to several points. The first half of the adjustment of the tariff resource tax will be jointly implemented. After entering the month of June, for abrasive companies, it has been hotly discussed that half-year tariff adjustment will begin to implement the resource tax adjustment. Due to the high energy-consuming industries smelted by abrasives, the main cost of electricity price abrasives, and the price of alumina as the main raw material for smelting abrasives will also increase. . Therefore, in the latter half of the year, the joint efforts of both companies will increase the production cost of abrasive companies, and will not be a minor test for abrasive companies.

According to experts from China's phenolic resin network, CPI and PPI will continue to rebound in the short term. As China's CPI (Presidential Consumer Price Index) PPI (Industrial Product Price Index) has continued to climb from month to month in the first five months of this year, the CPI will continue to rise inertially in June and July. Reached the high point of the year. In other words, the upward trend of prices will continue for a period of time in the future, and domestic economic inflation pressures cannot be ignored. The state may continue to use multiple policy measures to strengthen the management of inflation expectations guidance. In addition, the capital shortage situation will be normal in the second half of the year. Judging from a series of economic data in the first five months of this year, China’s central bank is currently releasing a reasonable level of new basic payments every month, which is in line with previous expert expectations. However, due to the high rate of deposit preparation, the return of the open market is also very strong in the early stage, and it has been difficult to change the liquidity situation. Last year, the introduction of a series of measures to save the economy compared to the country's impact by the global financial crisis, it seems a bit too much effort, is currently recycling. Therefore, the capital shortage will be normal in the second half of the year. China’s foreign trade market cannot be blindly optimistic. Although the situation of China’s foreign trade in the first half of this year was good, the volume of imports and exports continued to increase. In particular, the country’s exports grew by nearly 50% in May, which was significantly better than expected. However, after careful analysis, we will find that China's foreign trade market can not be blindly optimistic in the second half. First of all, the European sovereign debt crisis is still spreading in the euro area. Although sovereign countries all try their best to rescue them, they have not been effectively contained so far. If they continue to deteriorate, they will definitely affect China’s exports to the euro zone countries. In addition, the US-Kenigah exchange rate battle seems to have calmed down at the end of April, but with the end of the U.S. economic dialogue, the U.S. has continued to regard the U.S. exchange rate as the main sign of U.S. trade imbalance. * Appreciation pressure possible.