Paint enterprises officially enter the "ice age"

(Xinhua) -- On August 11, the central bank announced a market reform of the yuan's median price quote and slashed its one-time price by 1,136 basis points to 6.2298, down 1.86 percent from 6.1162 on the previous trading day. At the same time, the central bank announced that the yuan's median price will refer to the closing rate of the interbank foreign exchange market on the same day. One-time depreciation of a thousand points, depreciation of nearly 2%, the devaluation of the RMB will have an impact on the development of all industries. Of course, as a supporting industry
coating
industry can not stay out of the way.
rmb depreciation will stimulate the rapid development of the foreign trade market, for the U.S. dollar settlement of trade, home appliances and other companies, the devaluation of the yuan can also increase exchange earnings, thereby enhancing the company's net profit. In addition, the devaluation of the renminbi, while stimulating exports such as trade and textiles, will bring more business and orders to container transport, thus stimulating the shipping market.
With the RMB depreciation of the container, shipping business stimulus, will further increase the demand for container coatings, industrial
heavy anti-corrosion coatings
products, from this point of view, the devaluation of the RMB will further expand the demand for the coatings industry. This is
good news
domestic coatings enterprises.
, however, from the domestic market point of view, the situation is not very optimistic. A fall in the exchange rate would trigger a partial outflow of capital, further exacerbating the funding gap in the property market, and a weaker yuan would raise the relative price of goods, leading to a decline in the purchasing power of the renminbi, which would also increase the pressure on real estate sales. Structurally, due to the population density and purchasing power of large cities such as Guangshu in the north, the impact of RMB depreciation on the property market is smaller than in the second- and fourth-tier cities, real estate enterprises in third- and fourth-tier cities need to withdraw funds must be price promotion, stimulate consumers' desire to buy housing, which will further stimulate the development of the domestic
built coatings
industry.
Although the devaluation of the RMB will lead to the short-term development of the foreign trade market and the domestic real estate industry, but at the same time will also lead to price increases, for paint enterprises, not only raw materials and product costs will rise to a certain extent, but also labor costs will be further increased, which will increase the operating costs of paint enterprises, reduce the operating profits of paint enterprises.
Under the limited space for the development of the domestic coatings industry, with more and more stringent environmental protection policies, RMB depreciation and other factors, will speed up the reshuffle of the domestic paint industry, there will be a large number of paint enterprises will withdraw from the paint industry. This can be said to be the domestic paint enterprises just arrived in the winter era,
in the short term, the devaluation of the RMB may impact asset prices, resulting in exchange losses in some industries, but in the long run, the devaluation of the RMB is beneficial to trade exports, reduce export pressure, increase employment, which will further strengthen the real economy, and enhance economic growth.
But from the current domestic paint product quality and cost-effective aspects, domestic paint enterprises want to truly enter the international market, in the international paint products, still need to practice for a while. On the one hand, domestic paint industry standards will generally be lower than international standards, especially in VOC emissions. On the other hand, in terms of quality, there is still a big gap between domestic paint products and international paint products, we do not have environmental protection and quality competitive advantage, it is difficult to enter the international market, in other words, even if the RMB depreciation, and then promote the development of foreign trade business, the quality of domestic paint products can not meet international standards, it is difficult to win the market.