The overseas epidemic has forced manufacturing orders to return to China, but foreign trade practitioners in many industries said: "The volume of orders has increased sharply, but compensation has to be paid."
Under the current background, what challenges do ceramic foreign trade and export face? Recently, many people engaged in the ceramic export trade told "Ceramic Information" that under the situation of dual energy consumption control, power rationing tide, raw material and fuel prices "taking off", and sea freight soaring 10 times, ceramic foreign trade is also facing huge challenges. Challenges - costs are skyrocketing, product prices are difficult to increase, profits are getting thinner and thinner, and we are faced with the dilemma of not being able to take orders and having no new orders to take...
The average unit price of exports has increased for five consecutive years
But it cannot offset the soaring cost
A few days ago, the General Administration of Customs released relevant ceramic tile export data. From January to August 2021, my country's ceramic tile export volume was US$2.665 billion. Among them, my country's ceramic tile exports in August were US$354 million, down 9.35% from US$390 million in the same period last year, while the average export unit price rose to US$6.88/㎡.
According to statistics from the General Administration of Customs, before 2015, the average unit price of my country's ceramic tile exports increased from US$4.69 per square meter to US$7.31. After 2016, there was a cliff-like decline, with a drop of 29.69% in 2016.
From 2017 to 2020, although the average unit price of exports increased continuously, reaching US$5.39/㎡, US$5.76/㎡, US$5.91/㎡ and US$6.609/㎡ respectively, it was still not as high as the average unit price in 2015.
In fact, the average unit price of many exported tiles, polished tiles and glazed tiles is close to the production cost. At that time, many ceramic export companies had no choice but to trade price for market. Because there are export tax rebates, fundamentally speaking, there is still money to be made from exporting ceramic tiles.
But now, shipping prices have increased, raw material prices have increased, and labor costs have also increased, but the products cannot increase, making ceramic foreign trade people miserable. It was already very difficult, and now there is another "power rationing and production shutdown."
“With power cuts, we will soon be out of stock.” A ceramic foreign trader who did not want to be named said that the price of natural gas has risen to 4.3 yuan/㎡, and the price of coal at the factory has also exceeded 2,200 yuan/ton. Not only that , the increase in the price of raw materials for production is also alarming. The increasingly high production costs have caused ceramic foreign traders to be afraid to accept orders.
According to incomplete statistics from "Ceramic Information", since mid-to-late September, with the cost of raw materials rising sharply and ceramic factories across the country experiencing power cuts and gas shortages, large-scale shutdowns and production cuts, the ceramic industry has set off a round of violent ceramic tile price increases. tide. Hundreds of ceramic factories in about 20 provinces including Guangdong, Guangxi, and Fujian collectively issued price increase letters, raising prices simultaneously around October 1.
However, it is very difficult to increase the export unit price of ceramic tiles. Currently, many of them follow the previous unit price, which is basically a loss-making transaction. "The greater pressure is that the global economic development is sluggish and customers have no business, so we have no orders to take!" said a ceramic foreign trade person.
Profits from ceramic tile exports are getting thinner and thinner
Overseas customers are deterred by sky-high price positions
Relevant statistics show that from June last year to early September this year, shipping freight continued to rise. The price of a 20-foot standard container from China's eastern coastal port to the US West Coast (referred to as the "US West Line") rose from US$1,000 to US$1,000. 10,000 US dollars, reaching a peak of 15,000 US dollars;
However, the shipping rates on the "Western US Line" have plummeted recently. There are reports that the price of sea freight from Ningbo Port and Shanghai Port to the West Coast of the United States has dropped sharply, with "a three-month increase lost in three days." The current sea freight price of the "Western America Line" "should be a little more than 12,000 US dollars per TEU, which is almost the price three months ago."
Of course, the decline in sea freight rates mainly depends on the route. The US-Western route is falling, but prices on other routes have also skyrocketed. The price of sea freight to the Middle East has increased from US$300 to US$4,500.
Many ceramic foreign traders revealed that taking a 20-foot container as an example, it can hold 27 tons of ceramic tiles. If it is fully polished and glazed in the size of 800×800mm, it can hold approximately 1,075 square meters. Judging from the current sea freight, the sea freight per square meter has far exceeded the unit price of the ceramic tiles themselves.
“The skyrocketing sea freight and sky-high warehouse fees have also stopped overseas customers.” Another ceramic foreign trade person said that orders booked in advance cannot be shipped and can only be backlogged in the warehouse. The more they pile up, the more capital turnover is encountered. difficulty.
Vice Minister of Commerce Ren Hongbin also previously stated that recent surveys show that small and medium-sized foreign trade companies are under increasing operating pressure. It mainly faces two difficulties. First, shipping freight remains high. Second, the prices of some raw materials are still high. The profits of small and medium-sized foreign trade companies have been severely squeezed and they face greater difficulties.
Ceramic import and export companies also face huge challenges. According to "Ceramic Information", in 2017, the gross profit margin of trading companies mainly engaged in the import and export of ceramic tiles in Guangzhou and Foshan was generally 3%-5%. In the past two years, due to various factors, many trading companies importing and exporting ceramic tiles have gone bankrupt.
A person in charge of a ceramic trading company pointed out, "Ceramic factories are facing a general increase in production costs, and the profits from the export trade of ceramic tiles are getting thinner and thinner. It is so thin that we can hardly believe it. Despite this, we still have to spend tens of millions of dollars to Keep customers."
There is a shortage of overseas orders, it is difficult to increase export prices, and sea freight prices are skyrocketing... Against this severe background, many ceramic foreign trade people said, "Maybe we will have an early holiday!"
(Article reproduced from Ceramic Information)
