About China’s ceramic tile market in May 2024

 

In China, the previous peak sales season was in May, but in 2024, it seems cold. In production areas such as Hebei, Henan, Shandong, and Shanxi, some companies stopped production before “June 1st”. There are environmental factors, a large part of them are market reasons.

Suspension of production is a helpless move, but in the case of overcapacity in the market and increasingly fierce terminal price wars, active suspension outputting may not be a bad thing.

Large-scale suspension of production in Hebei and Henan

 

Gaoyi Area

 

Industry insiders in the Gaoyi production area said that at the beginning, the powder was only made during the day, and then it was changed to a full suspension of production. Regarding the reason for the suspension of production, the person explained that it was “environmental factors” and that they received a notice, but no public announcement documents were presented.

As for the time of resumption of production, some company leaders mentioned that they might start production around June 12, and some companies noted that they have not yet received a notice of the resumption of production.
Regarding the impact of the suspension of production on sales, many insiders in the Hebei production area said, “No impact yet.” The main reason is that as the market shifts from incremental to stock, the production and sales ratio of some companies is unbalanced. “This suspension of production is an opportunity for companies to destock.”

 

 

Neihuang, Henan Area

 

In Neihuang, Henan, an insider said that most of the ceramic production companies in Neihuang have stopped production.

“Neihuang now only has 4 production lines, and there are many representative high-quality companies, such as some production companies that implement 3C standards have also stopped production.” As for Hebi, which is not far away, the above-mentioned person said that almost all kilns in the Hebi production area have stopped production.

The reasons for the suspension of production mainly include two aspects, one is environmental factors, and the other is market factors.

 

Zibo Area

Some companies in Zibo have stopped production

The companies that have not stopped production have three characteristics.

Visiting the Zibo production area, we learned that in May, some production companies stopped production due to market reasons.
Mr. Li, the person in charge of a production enterprise in the Zibo production area, analyzed that the enterprises that are currently operating will have the following characteristics:
First, compared with other enterprises, the production cost is low, or the production capacity is large, or the energy-saving equipment is used, so the unit cost of tiles is low;
Second, they have core production technology. For example, several enterprises that concentrated on introducing process equipment in 2023 can produce differentiated products, and the current production and sales are balanced;
Third, the product quality is stable, the production conversion is flexible, the reputation is good, and the service awareness is strong.

 

Linyi Area

Linyi: A small number of enterprises have reduced production

In Linyi, Shandong, the production and sales rate remains benign. The insider introduced that some enterprises in Linyi have stopped production, and other enterprises with multiple production lines have chosen to suspend the production lines with greater production and sales pressure.

 

Yangcheng, Shanxi Area

Yangcheng, Shanxi: Overall production and sales balance

In Yangcheng, Shanxi, Tao Chengjun visited and learned that in the past two years, ceramic enterprises in Yangcheng, Shanxi have developed steadily.

 

According to the person in charge of a production enterprise in Yangcheng, on the one hand, Yangcheng’s gas cost is low, which directly lowers the overall product price, and on the other hand, Yangcheng enterprises have relatively healthy competition, developing products that meet market demand, and have flexible production conversion.

 

“For example, some small floor tiles and garden tiles do not compete for a large share of the product market. Secondly, they fill the gap in market demand. Moreover, they are close to Zhengzhou, Henan, so small car logistics is more convenient.”