After entering May, the price of raw materials still shows no signs of correction, and even continues to rise, in this context, the operating costs of coating companies will be in the cycle channel of high operation. Although some coating companies have taken various measures to avoid the failure of business strategies brought about by the rise in materials, for more paint companies, in the face of rising costs in the upstream supply chain and fierce competition in the paint market, the complexity and variability of the first-line market operations have suddenly surged.
The prelude to the rise in raw material prices has begun again
Entering the second quarter, the state continued to promote the recovery of domestic demand, driving the release of consumer demand and continuing to support the supply and demand cycle of the domestic economy. In addition, due to the extremely loose monetary policy and a large number of infrastructure projects adopted by some developed countries, the successive vaccinations of the new crown vaccine have promoted global demand, which has supported the strengthening of the price of bulk raw material products.
In April this year, under the influence of factors such as the continuous consolidation and enhancement of the recovery of domestic demand and the return of superimposed export orders, the chemical market situation remained strong. While the economic environment is improving, the domestic bulk chemical prices have also continued to rise, and some data show that more than half of the chemical prices have risen to varying degrees compared with the previous month. Due to the repeated epidemics, the production of some foreign large factories has been suspended and restarted, and the production progress has been greatly affected, making the market supply continue to be tight.
According to the quarterly reports released by listed companies, the market demand for coatings is gradually recovering. Sankeshu, Yashi Chuangneng, Jinlitai, Shanghai Xinyang, Yusanxia A, Guangxin Materials, and Matsui Co., Ltd. in the first quarter of 2021 increased by 241.20%, 163.65%, 108.96%, 62.66%, 52.72%, 37.85% and 36.68% respectively year-on-year. According to Tujie, the sales revenue of Bardez, Gabriel, Meitus and other enterprises in the first quarter of this year also achieved substantial growth year-on-year.
From the perspective of the international market, the sales revenue of Bose Bear, PPG, Sherwin-Williams, AkzoNobel, Axalta, Jotun and BASF in the first quarter of 2021 increased by 15%, 15%, 12.3%, 10%, 8.1%, 7.9% and 5% respectively year-on-year. Judging from the disclosed information, the field of architectural coatings and industrial coatings has been recovered, but the degree of recovery in different market segments is not the same.
Under the influence of the recovery of market demand and other factors, the prices of titanium dioxide, resins, emulsions, pigments, additives and chemical raw materials such as bisphenol A and propylene glycol continued to rise after entering the second quarter. According to the data, the paint purchase index in April 2021 was 150%, which increased sharply from the previous two years (96% and 90% in the same period of 2019 and 2020, respectively), titanium dioxide, epoxy resin, propylene glycol, ethyl acetate, n-butanol, etc. all rose.
After entering May, titanium dioxide ushered in the fifth price increase of the year! On May 6, the three listed companies of CNNC Titanium Dioxide, Jinpu Titanium and Ananda once again raised the sales price of titanium dioxide, and the price increase of the three companies in this round remained the same: the domestic price increase was 1,000 yuan per ton, and the increase for various international customers was 50 US dollars / ton.
Tujie reporter learned from a variety of channels that Dongjia Group, Hengtong Titanium, Donghao Titanium, Dawn Titanium, Zhenti Chemical, Longteng Titanium, Fangyuan Titanium Dioxide, Xinfu Titanium Dioxide, Dahuotong Titanium industry and many other titanium dioxide companies have followed up; in addition, the titanium dioxide leader Chemours announced that titanium dioxide products rose by 200 US dollars / ton from May 1. Titanium dioxide has once again opened a new round of price increase cycle.
It is worth mentioning that a number of titanium dioxide companies have raised prices many times this year, among them: China Nuclear Titanium Dioxide from January to May this year, China Nuclear Titanium Dioxide has announced an increase in the sales price of titanium dioxide every month, that is to say, this is its fifth price increase this year. At the same time, this is the eighth price adjustment of Cnnceur titanium dioxide since October last year.
Since February 8 this year, Gimpo Titanium has raised the price of titanium dioxide for the fourth time. The four price increases were February 8, March 2, April 6, And May 6, all of which were from the announcement today, and the company's anatase and rutile titanium dioxide sales prices were raised by 1,000 yuan / ton for various domestic customers and 150 US dollars / ton or 50 US dollars / ton for international customers on the basis of the original price.
Not only that, but the prices of raw materials such as resins, pigments, TDI, and MDI continue to rise. Jiaozuo Baili United Pigments decided that from May 1, the unit price of each type of iron oxide yellow product will be raised by 300 yuan / ton at the original execution price, and the unit price of each type of iron oxide black and iron oxide red will be raised by 200 yuan / ton at the original execution price. Hunan Sanhuan Pigment, Huayuan Pigment and other pigment companies decided to raise the sales price of iron oxide pigment products by 500 yuan / ton (80 US dollars / ton) from May 1.
It is reported that the price increase of titanium dioxide and resin products in the international market is due to the unprecedented cost pressure in the manufacturing, labor and logistics fields due to the gradual recovery of the global economy. The blockage of the Suez River at the end of March and the strike tide in many ports in the United States and Canada have added a layer of freight costs to the already gradually stable price of raw materials.
On April 30, the National Bureau of Statistics said in a statement: At present, international logistics is not smooth, container shortage, freight rise and other problems of human resources, manufacturing suppliers distribution time index for 3 consecutive months less than 44%, enterprise raw material procurement cycle extended, normal production activities are affected.
The paint industry may once again set off a wave of price increases
Since the beginning of this year, there have been many rounds of price increases in paint raw materials, and this round of raw material price increases is not only large in price but also lasts for a long time. Forced by the rising cost of upstream raw materials, more than 400 painting companies, including Nippon, Sankeshu, China Resources, Gabriel, Haihong Old Man, Baota Mountain Paint, etc., have raised sales prices in February and March this year to buffer the pressure on operating costs.
After entering April, there is still no sign of a correction in raw material prices, the operating costs of coating companies continue to increase sharply, and the paint industry has once again set off a round of price increases, nippon, Valspar/China Resources, Dabao, Baichuan, Gabriel (floor paint) and other coating companies have raised the sales price of products, many of which have raised prices twice this year.
However, after entering May, raw material prices continued to strengthen, and the rally was difficult to stop. "Commodity disruptions affecting the coatings supply chain have led to higher raw material costs, and we expect to maintain this upward trend at least in the third quarter." Michael McGarry, chairman and CEO of PPG, judged the price movement of raw materials. "In the second and third quarters, the destruction of raw materials and inflation rates were expected." AkzoNobel predicted so.
Sherwin-Williams Chairman and CHIEF Executive Officer John Morikis echoed the same sentiment, "Given the short-term uncertainty over raw material supply and cost inflation, our adjusted earnings guidance for the full year remains unchanged. "For the trend of raw material prices, Sherwin-Williams expects raw material prices to rise from high single digits to low double digits in the second quarter.
Musk, the parent company of international coatings giant Bose Bear, said, "We have taken action and developed further plans to offset the raw materials and logistics inflation we are experiencing." While we expect these challenges to continue in the coming quarters, we believe we are well prepared. ”
As raw material prices continue to stand firm, international giants can hardly bear huge cost pressures, so they have said that they will raise product prices. Michael McGarry, chairman of PPG, said, "We are prioritizing further increases in selling prices, which we hope will fully offset the increase in raw material costs in the second half of 2021." ”
Thierry Vanlancker, CEO of AkzoNobel, said, "Looking ahead, we will continue to focus on offsetting rising raw material costs through pricing measures and cost constraints to weather the storm and lay a solid foundation for our growth." Sean Lannon, chief financial officer of international coatings giant Axalta, said, "While we will see an increase in the effects of input inflation from the second quarter, we also expect to work to pass on most of the inflation through price increases." ”
On April 27, China Coatings Co., Ltd. (CMD), an internationally renowned coatings company, announced an increase in the sales price of coating products. The company said the price of epoxy resins has been rising sharply since the end of 2020, with prices reaching record highs and still rising. The price of various coating raw materials, such as solvents, fluctuates with the price of crude oil and the cost of land and sea transportation. In particular, the price of copper oxide hit its highest level since 2010 and is expected to remain high. All of these are factors in our recent cost increases.
Li Mingyue, an observer of the Tujie industry, believes that from the research and judgment of international coating giants, the rise in raw material prices may continue to the second quarter or the third quarter, which means that the price increase of raw materials will bring huge pressure to enterprises, and enterprises are bound to make various reactions, including price increases and other cost control measures. At the same time, whether it is a foreign market or a domestic market, it will also usher in a new round of price increases.
In fact, a number of paint companies have begun to raise the price of paint products. Toyama Coating Company announced that it will partially adjust the sales price of powder coatings from May 1, polyester/TGIC type (outdoor) high-gloss and flat light categories rose by 1,000 yuan / ton, texture classes rose by 1,000 yuan / ton, metal effect categories rose by 1,000 yuan / ton; epoxy / polyester (indoor) highlight and flat light categories rose by 1,000 yuan / ton, texture classes rose by 1,000 yuan / ton, metal effect classes rose by 1,000 yuan / ton. Hunan Gutu Environmental Protection Technology Co., Ltd. announced that the sales price of powder coating products will be raised by 10-35% from May 8.
Li Mingyue analysis said that this round of raw material price increases are large, the duration is too long, has exceeded the expectations of most paint companies and coping capabilities, even if the company tries to control the cost can not resist the cost pressure brought about by the sharp rise in raw material prices, so it is reasonable to seek to increase the sales price to alleviate the current cost pressure. (Tu Jie)