The economic operation of the coating industry presents three characteristics

On November 2, the 2022 Asia-Pacific International Coatings Industry Development Conference was held
in the form of a live webcast.
At the meeting, Liu Jiezuo, acting secretary general of China Coatings Industry Association, pointed out in the theme report "Economic Operation and Trend Analysis of China's Coatings Industry" that the economic operation of the coatings industry presents three characteristics: raw material price shocks, accelerated class differentiation, and weak
downstream consumption.
He suggested that relevant enterprises should pay close attention to the development and changes of the industry and upstream and downstream key areas, and adjust their strategies in a timely manner to cope with the current situation
.

According to Liu Jie, since the beginning of this year, the production and operation of Chinese coating enterprises have shown a differentiated development trend
of segmented increase and decline.

The report shows that in January ~ August this year, China's total paint output was about 22.
597 million tons (including the output of enterprises under the regulations), a year-on-year decrease of 4.
3%; The total revenue of main business was about 289.
76 billion yuan, a year-on-year decrease of 2%; Total profit was about 14.
11 billion yuan, down 26%
year-on-year.

From the situation of each province, in January ~ August, the paint production of most provinces has decreased
year-on-year.
In particular, Guangdong, Shanghai and other places were affected by the epidemic, and the decline was large
.
Among them, Guangdong, which has always been an important support for the industry's output growth, fell by 4.
2%
year-on-year.

"Overall, the economic operation of the coatings industry this year presents three characteristics
.
" Liu Jie pointed out that first, the upstream raw material price shock has led to increased
uncertainty.
Affected by geopolitical conflicts and the epidemic, there have been frequent price increases and shortages in the fields of mining and chemical raw materials, international chemical giants (European enterprises) are facing a crisis of energy and petrochemical raw materials, and a vacuum has appeared in the
international market.

Second, class differentiation has accelerated
.
Enterprises of different sizes are accelerating stratification, and the development of "specialization and innovation" has become a new hot spot
.
This is of strategic significance
for stabilizing the upstream and downstream industrial chain.

Third, downstream consumption is weak
.
At present, the downturn in downstream consumption has been the consensus of
the coatings industry.
The real estate sector is underperforming at a slower growth
rate.
The paint industry, which is closely related to real estate, has naturally been affected
a lot.

At the same time, Liu Jie pointed out that keywords closely related to green health, such as "underwater life, climate action, health and well-being", have become the sustainable development direction
of the global coatings industry.
To this end, China's coatings industry should also keep up with the pace of development of the global coatings industry, focusing on the four key points of "responsible consumption and production, sustainable cities and communities, health and well-being, and quality education"
.
Specifically, it includes details such as waste management recovery and recycling solutions, green product management systems, and the proportion of environmentally friendly products
.

For the development trend of the domestic coating industry in the later stage, Liu Jie said that the overall direction of stabilizing and ensuring supply at the macroeconomic level will not change in the future, and the downstream market has stabilized and improved significantly
.
In particular, the demand for coatings in industrial sectors such as automobiles, furniture, machinery, electronics, etc.
will increase
.
However, the signs of stabilization in the real estate market in the second half of the year are still unknown, and the impact on the architectural coatings market is still large
.
All relevant enterprises should take countermeasures
such as inventory and accounts receivable.

"From the perspective of the market, it is expected that the supply of coatings in the fourth quarter will be relatively sufficient, and the average market price will decline
.
However, after entering the autumn and winter, due to the Russia-Ukraine conflict, the epidemic and other factors will aggravate the tension of energy and chemical raw materials, the gap in fine chemical products in Europe and the United States will continue to increase, and the cost will rise rapidly
.
This will have a certain siphon effect on China's related product market, and domestic exports will inevitably increase
.
Liu Jie analyzed that on the whole, in the fourth quarter, China's coatings industry may pick up as a whole, production and sales growth is expected to rise to about 3%, and the decline in profit growth will narrow, but the real positive is still facing a severe test
.

To this end, Liu Jie reminded coating companies to do a good job in guaranteeing the procurement of corresponding funds and raw materials to cope with the overall situation
of possible upstream price increases and slowdown downstream demand.