Since September, the impact of policies such as "dual energy consumption control" and power shortages have continued to ferment, once again causing ceramic enterprises in Guangdong, Guangxi, Yunnan, Hunan and other production areas to encounter power cuts and production suspensions.
Affected by this, in addition to ceramic factories, there are also most upstream raw material suppliers.
Supply was interrupted due to sudden production shutdowns, upstream raw material prices skyrocketed, the collection cycle was extended by another 2-3 months, accounts receivable increased, and sales declined...
Many suppliers said frankly that at this stage, it would be a loss if they did it, and it would be a loss if they didn't do it. The risk is too great, and they dare not take any business.
Ceramic factory suddenly stopped production due to power cuts
Supply interruption, payment cycle extended by another 3 months
Recently, some companies in Dongguan City, Foshan City, and Zhongshan City, Guangdong Province have received notices from the Power Supply Bureau, stating that they will implement "stop industrial power consumption for the entire period" and "open for two, stop for five" or even "open for one, stop for six" With power rationing measures in place, the situation remains grim.
However, not only ceramic companies are affected by this round of "dual energy consumption control" and power restriction policies, but also the vast majority of upstream ceramic raw material suppliers.
Recently, "Ceramic Information" visited a number of upstream chemical and color glaze companies, and they all said that many ceramic companies have suddenly stopped production recently, which has had a great impact on normal supply and payment collection:
● “Originally, we were preparing to deliver the goods in the morning, but the ceramic factory called us and said that we didn’t need to deliver them, and that we would have to limit power and stop production.”
——Sales person in charge of a certain ceramic chemical company
● “Recently, sales have dropped by nearly half, and the collection cycle has also been extended, which has increased accounts receivable by more than 9 million yuan.”
——A ceramic chemical sales company in Foshan
● “The recent sudden power cuts and production shutdowns in ceramic factories have affected not only sales, but the collection cycle has been extended by 2-3 months on the basis of the past.”
——The person in charge of a ceramic glaze company in Foshan
● “One is power rationing, and sales are sluggish. Some ceramic factories have stopped two of their three lines. If they stop, they will not be able to collect payment according to the contract. I have a customer who has only been producing for 4 months since last year. I owe more than 2 million yuan, and it’s useless to press for payment. I can’t pay it.”
——Sales of ceramic glazes and inks
● “The ceramics factory in Wuming, Guangxi placed an order for me and was preparing to ship the goods. Suddenly, the purchaser said they had stopped production and there was no need to ship them.”
——Sales of ceramic glazes in Foshan
● “We owe more than 10 million yuan in debt, and now we are supplying goods abnormally and unable to collect payment normally. It’s too difficult.”
——Ceramic chemical sales manager
● “Affected by power restrictions, ceramic factories in some areas of Guangdong and Guangxi have suspended and reduced production. The demand for zirconia has dropped significantly recently.”
——The person in charge of a zirconia company
● “Originally, 100 tons of chemical materials were used per month. Due to the recent frequent kiln shutdowns in ceramic factories, the monthly supply is now reduced to 30 tons.”
——A ceramic chemical material supplier in Foshan
● “Originally, we were preparing to deliver the goods in the morning, but the ceramic factory called us and said that we didn’t need to deliver them, and that we would have to limit power and stop production.”
——Sales person in charge of a certain ceramic chemical company
……
Many suppliers of ceramic chemicals and colored glazes said that in the second half of this year, sales of ceramic factories in many production areas declined, and inventory backlogs led to the suspension of some production lines. Recently, as the country's "dual control" has become stricter, power shortages have led to sudden shutdowns of ceramic factories, declining demand for raw materials, declining sales of suppliers, and the payment cycle has been extended by another 2-3 months on the original basis.
Raw raw material prices and reduced market demand
“It’s a loss if you do it, and it’s a loss if you don’t do it!”
In fact, some suppliers said that as early as May and June, ceramic factories in many production areas began to experience sluggish sales. Coupled with the surge in upstream raw material prices and other factors, business became increasingly difficult to do.
“Now we are being squeezed from both ends. On the one hand, the price of raw materials has skyrocketed. On the other hand, some ceramic factories have begun to take the initiative to shut down kilns to relieve inventory pressure. Now they have begun to limit power and stopped immediately. Life is hard, so we have to endure it. ” said one interviewee.
According to media reports, due to the recent “dual control” Affected by policies and power rationing, major chemical production areas such as Jiangsu, Inner Mongolia, and Shaanxi have been affected. Chemical plants have suspended production and restricted production in large areas, causing the supply and demand balance of the chemical industry chain to be affected, and the prices of many types of raw materials have soared rapidly.
According to rough statistics from "Ceramic Information", the price of a leading international zircon sand has increased by 63% this year. Affected by this, the price of zirconium silicate, the zirconium product with the largest consumption in the ceramic industry, has also increased.
Not only that, the price of caustic soda has also reached a new high. Compared with the beginning of this year, the price increased by 143% in late September. What’s more fatal is that the high price is not only one aspect, but more importantly, the upstream manufacturers in the north have stopped production, resulting in This type of product is seriously out of stock.
"Although zinc prices are relatively stable, the futures market is also constantly fluctuating, which will also affect the purchase price of raw materials. Now we basically have no profit margins and can only squeeze our own water." said a zinc oxide supplier.
A ceramic chemical supplier in Fujian said, "We used to supply raw materials to ceramic factories in Fujian, and each factory deposited 3 million to 5 million yuan. We were afraid of it, but the joke is that this year we stocked up on silicic acid in advance. Zirconium, because of this wave of raw material price increases, has actually made some money.”
At the same time, in the second half of the year, ceramic factories in many production areas began to close their kilns due to poor sales. A ball miller at a ceramics factory in Guangdong said that the ceramics factory where he works is currently unable to sell bricks and has recently stopped production due to power cuts. He has been on holiday for more than ten days and his income has been affected.
In this regard, many suppliers also reported that sales of raw materials declined to varying degrees in the second half of the year. "Nowadays, there are fewer and fewer orders, and there is still demand from ceramic factories. If you don't supply, someone else will supply it immediately. If you do it now, you will lose money, and if you don't do it, you will lose money."
However, some conservatives believe that it is the off-season of the market and the warehouse itself has already been liquidated. A temporary suspension of production is not a bad thing. Suppliers do not need to supply goods or make deposits, and cooperation risks are relatively reduced.
A ceramic chemical supplier said, "As soon as we start supplying, there is a financial risk. Now I don't want to do business. I am really afraid of 'death'. Raw materials are priced at several prices a day, and business has dropped a lot."
Increased supplier risk
“Doing business is like walking a tightrope with bare hands”
"The risk of cooperating with ceramics factories is even greater now. I have a ceramics factory that I cooperate with. The normal production cycle this year is only 4 months. It has already defaulted on more than 2 million yuan in payment, and reminders are basically ineffective." a ceramic glazeThe material supplier said.
At the same time, some ceramic chemical sales managers said that accounts receivable alone have increased by 9 million this year, and ceramic factories have to postpone collection of payments.
In the view of many suppliers, many ceramic factories are now licking blood on the edge of a knife, and cooperation with suppliers is like walking a tightrope with bare hands without any safety measures.
“For a long time, suppliers in the ceramic industry have been relatively passive. Now if you want to do it, you have to deposit money. If you don’t want to do a lot, others will do it. Now you are especially afraid of problems in the ceramic factory. A deposit costs millions or tens of millions. There is no place to cry about the payment of goods."
A supplier of ceramic silt and chemical materials said frankly that he was previously in business with a ceramics factory in Guangdong and was owed a payment of 28 million yuan. Later, due to various factors, the sales channels of the ceramics factory were hit hard and production has been suspended ever since.
"In addition to these payments, we have been trying to save it since we were all in the same boat. We were not happy when it died. Later, we borrowed another 15 million yuan to restart the factory, but it still didn't work."
The above-mentioned supplier said that together with the payments from other suppliers, the total amount is more than 90 million yuan. In addition, it also includes more than 7 million yuan in arrears of workers' wages and subsidies, and more than 20 million yuan in bank loans.
“We have tried every method, including borrowing money to pay off debts and discounts, but there is still no solution. Several of us even wanted to invest money in it. If it can be revitalized, it would be a good thing for us. In the end, we invested 3 million yuan in it, and it was a splash. Even if it doesn’t make a splash, it’s better to exit in time. The industry is now in turmoil.”
In the view of many suppliers, this round of power rationing with different policies for different production areas, as well as the endless rise in natural gas prices and raw material prices, may cause ceramic factory owners to lose confidence and be unable to survive. Invisibly, The risks and pressures borne by suppliers have also further increased.
(Article reproduced from Ceramic Information)
