What is the state of the paint market? These data reveal the development trend of Chinese coatings

On November 2, the 2022 Asia-Pacific International Coatings Industry Development Conference was held in the form of webcast. That morning, China paint Industry Association acting secretary General Liu Jie at the meeting to make "China paint industry economic operation situation and trend analysis" theme report, from China paint industry economic operation brief, paint industry index analysis, paint industry economic operation trend analysis of three aspects of the profound and simple description.

Liu Jie pointed out that in 2022, due to the impact of the century epidemic combined with geopolitical conflicts and other factors that exceeded expectations, the downward pressure on the macro economy increased significantly. However, as the Central Committee's series of policies to stabilize the economic market gradually took effect, the macro economy showed a trend of stabilization and recovery. In the upstream and downstream of the downward situation, the production and management of China's paint enterprises appear segmented growth, decline differentiation development situation.

According to the report, from January to August 2022, the total output of the paint industry was about 22.597 million tons (including the part below scale), down 4.3% year-on-year; The total revenue of main business was about 289.76 billion yuan, down by 2.0% year on year; The total profit was about 14.11 billion yuan, down 26.0 percent year-on-year. Specific to the provinces, from January to August, most provinces paint production has declined year-on-year, Guangdong, Shanghai the largest decline, are deeply affected by the repeated epidemic.

According to the segmentation comparison between China and the global paint industry in 2021, there is no big difference between the proportion of China's paint industry segmentation field and that of the global paint industry segmentation field, with architectural coatings taking the largest proportion, followed by protective coatings. The difference is that the proportion of China's architectural coatings is 52%, 10 percentage points higher than that of the global coatings, but in the industrial coatings, wood coatings, automobile original paint, transportation coatings and other fields, China's proportion is generally smaller than the global, indicating that these fields still have great development potential.

In recent years, affected by the market environment, the economic operation of China's paint industry is generally not ideal, which also makes the paint industry head enterprise index has changed. According to the report, enterprises with a revenue of 3 billion yuan or more and 500 to 1 billion yuan saw rapid growth in their market share, increasing by 4.7 and 2.96 percentage points respectively compared with 2020. However, the market shares of enterprises with revenues of 1 billion to 3 billion yuan and 100 million to 500 million yuan decreased sharply, by 3.31 and 4.36 percentage points respectively compared with 2020.

The above data changes fully show that the industry concentration is increasing, and the trend of polarization is obvious. Large enterprises gradually eat into the market space of medium and large enterprises through scale, capital and market advantages, and gradually complete the enterprise market layout through enterprise merger, new factory and other multiple ways. However, some small and fine, small and excellent enterprises focus on product development and market maintenance in special fields, and do not compete with large enterprises for popular product market. They have high industry reputation and market profit space in special fields, adequate capital, stable market, and healthy enterprise development.

From the main business growth trend of "100 index" enterprises in 2020-2021, the total main business revenue of 100 index enterprises has made gratifying progress in 2021, increasing by 17.5% compared with the growth of 5.4% in 2020. However, the main growth trend of the "100 index" enterprises in 2022 has not been released. From the perspective of the operation situation of China's paint industry from January to August 2022, it is estimated that it is not too optimistic.

Liu Jie also released the paint price index analysis, as can be seen from the figure above, the 2022 price on the whole is more than 10 points higher than 2021, this year from January to August still showed a sustained trend of rising, only in September slightly down.

At present, the economic operation of the paint industry presents three characteristics respectively: first, the upstream price shock leads to increased uncertainty; Second, social stratification is accelerating, and maintaining stability is more important. Third, downstream consumption is weak, looking forward to encouraging policies. "And the real estate is closely related to the paint industry naturally has been not a small impact, looking forward to the state department can introduce policies to encourage consumption."

Liu Jie also said that the future macroeconomic level stabilization guarantee for the overall direction will not change, the downstream market in addition to real estate, stabilization trend is obvious, especially in the industrial field, such as cars, furniture, machinery, electronics and other areas of paint demand will increase. But the real estate market in the second half of the year is still unclear signs of stability, the impact on the building paint market is still large, the relevant enterprises should do a good job in inventory, accounts receivable and other measures.

The fourth quarter is expected to paint industry upstream supply is relatively sufficient, the average market price will fall. However, after the autumn and winter, due to the situation between Russia and Ukraine, the epidemic and other factors will intensify the tension of energy and chemical raw materials, the gap of fine chemical products in Europe and the United States will continue to increase, and the cost will also increase rapidly. Overall, the fourth quarter of our paint industry or overall warming, the growth of production and sales is expected to rebound to about 3%, the growth rate of profit will narrow slightly, can turn positive is still facing a severe test.