The impact of the hottest macro-control on Shangha

The impact of macro-control on Shanghai paint Market

the greater the resolution of the impact of macro-control on Shanghai paint Market

October 28, 2008

[China paint information] since the first half of 2008, under the control of macroeconomic policies, the growth rate of China's economic development is gradually falling back. As one of the key areas of national macroeconomic regulation and cooling, the future trend of the real estate market has attracted much attention. Architectural coatings and decorative wood coatings are one of the products attached to real estate. Therefore, understanding and analyzing the development of Shanghai real estate market in the first half of the year is of great significance to evaluate the future trend of Shanghai coating retail market

in the first half of the year, the real estate market in Shanghai experienced negative growth, and the "off-season theory" began to prevail

from January to March this year, especially from February to March, the trading volume of commercial housing in Shanghai showed a gradual trend of large-scale volume, which seemed to have a time of "warm spring and blooming flowers". But in April, the market situation fell sharply, and the trading volume fell by 11.2% over the same period last year. From May to June, the Shanghai real estate market has entered a price tug of war again, and some consumers still hold a wait-and-see attitude, with small sales volume. Until July, the price of Shanghai real estate market rose slightly, but it was still in a depressed state, so the previously trivial property market warmed up, and with the gradual progress of time, it began to subside

according to the analysis of the data report of Shanghai B & Q building materials supermarket, in the first 14 weeks of this year, the sales of main decoration materials (including bathroom, faucet, floor, ceramic tile, coating and other products) decreased by nearly 45% compared with the same period last year. By June, the sales volume still had a negative growth compared with last year, which reflected the general trend of the retail market of decoration and building materials in Shanghai

in the traditional building materials market, because the product prices of various building materials and decoration materials are lower than those of building materials supermarkets, it meets the low consumption needs of some consumers. Therefore, the decline in market sales is slightly lower than that in the building materials market

there are many reasons for the decline in the retail market of wood coatings

the demand for wood coatings mainly comes from two markets. One city plans to build 123 new food safety testing laboratories this year, which are coatings for the furniture industry, including coatings for the manufacture of various wood products; Another market is paint for interior decoration

the demand for paint in the furniture industry has shrunk in the short term: on the one hand, due to the impact of real estate, the sales of civil commercial housing are depressed, which will inevitably affect the overall decline in the total sales of finished furniture products. On the other hand, due to the impact of macro-control, reduction of export tax rebates, RMB appreciation, the U.S. subprime mortgage crisis, as well as old problems such as cost hikes and anti-dumping, China's wooden furniture exports have decreased

the above two factors have reduced the demand for furniture coatings. As some furniture, finished wood products and coatings for display and decoration will be purchased in the retail market, the sales volume of Shanghai paint retail market in the first half of the year will be reduced by 10%

affected by the adjustment of the real estate industry, the demand for interior decoration wood coatings also decreased significantly, and the sales volume in the first half of the year decreased by about 10% compared with the same period last year

the high temperature and Huangmei weather in June also affected the construction progress

for these reasons, in the first half of this year, the total amount of wood coatings in Shanghai decoration market decreased by 15% - 20% compared with the same period last year

the market demand for architectural coatings has decreased slightly, but there are more opportunities for the development of the engineering market.

the direct relationship between architectural coatings and the construction industry and real estate is obvious. The negative growth of real estate is bound to lead to the desolation of the decoration market. From February to March this year, the number of commercial residential units traded in Shanghai increased year-on-year, but in April it fell by 11.2% compared with last year. From May to June, it began to recover gradually, but the market sales volume was not large

reflected in the retail market, the sales of building interior wall coatings decreased by about 20%. But on the whole, despite the severe retail sales in the first half of the year, the overall demand of the architectural coating market is still very optimistic, mainly due to the following opportunities:

the Shanghai WorldExpo held in 2010 has an annual investment of 100billion yuan from 2006 to 2009

the main goal of the "Eleventh Five Year Plan" for the comprehensive transformation of old residential areas from flat to slope in Shanghai is to complete 4million square meters per year

the standard for building design of central villages in the suburbs of Shanghai designs the construction of 60 new towns and 600 central villages

there are 12million square meters of real estate residential construction every year (including affordable housing and low rent housing)

the "Shanghai urban appearance standard regulations" issued and implemented in 2005 requires that the outer walls of buildings and structures facing the street in main roads and landscape areas be cleaned and painted regularly, including coating for 2-3 years. This also provides a huge market space for architectural coatings. However, these opportunities have little impact on the sales index of the paint retail market. For example, ICI, Nippon, shendeo, Huili, Zhongnan, Fuchen and other brands of architectural coatings performed well in the first half of this year

the rise in the price of raw materials has put coating enterprises in a dilemma of left-right squeeze

since the rise of raw materials in 2004, coating enterprises have felt increasing pressure. Many small and medium-sized enterprises that hit the market with low prices can no longer obtain price advantages because of the sharp increase in costs, to the point of selling more and more. Some small and medium-sized enterprises are difficult to maintain, or close down or transform. If only some small enterprises were greatly affected by the rise of raw materials from 2004 to 2005, the team said that they had carried out early experiments in 2006, and the raw materials continued to rise significantly from 2004 to 2008, which was a test for the entire coating industry

crude oil innovation countries encourage the development of major environmental protection technology and equipment, and the rise of materials such as utilization methods and channels has led to a sharp rise in the cost of coating manufacturing industry. Solvent based coatings are the most costly. In addition, auxiliary materials are also rising

the substantial rise in the price of upstream raw materials has resulted in a significant decline in the profits of production enterprises. On the one hand, the management and control of enterprise costs should be beneficial to inward management; On the other hand, the ex factory price of products should be adjusted externally. However, it is even more difficult for coating enterprises to increase the price of their products. First, in the face of many peer enterprises around, price increases need to be very cautious; Second, we should also pay attention to the attitude of dealers and the reaction of market end consumers

enterprise risks and opportunities coexist. For large and medium-sized enterprises, opportunities still outweigh risks. Some enterprises that compete in the market with brand operation can still achieve good sales performance in the case of market downturn. For example, the main production and sales brand of solvent based wood coatings in Shanghai market, oulong paint, its market sales from January to June increased by 16.4% over the same period last year

to sum up, 2008 is a year full of multi-level challenges for the building materials market and coating enterprises, and it is also a comprehensive test for the market