The paint market "will hold on" price pressure will blow

Looking at the construction coatings market in the first half of the year, there was a trend of 'mass price rises'. March and April are the golden season of the property market. The old saying of “The Spring of the Year” has an absolute appeal in the real estate market. The real estate that has experienced the accumulation of power throughout the winter must have a high profile appearance at the Spring Housing Fair, regardless of price. Or in terms of sales volume, there is a tendency of 'stable growth without falling'. Such a good start has also given a boost to the supporting architectural paint market. For paint manufacturers to cooperate with the second half of the year or will continue to sell the situation, but also in the channel construction, especially the terminal store, dealers and other aspects of intensive training and investment and a lot of manpower and material resources. In terms of price, the price of coatings in the first half of the year rose with the price of important raw materials such as titanium dioxide, solvents, iron oxide pigments, and resins, and the coating price increased by about 10%-15% over the same period.

The property market is bleak because traditional autumn and winter seasons are not suitable for large areas of wall painting, especially in the northern regions. With the gradual cooling of the weather, after entering November, the wall painting and insulation work cannot be carried out due to climate conditions. Therefore, entering the fourth quarter, especially in the shadow of the property market 'turning point of view' under the shadow of paint production will be transferred to the off-season. Under the influence of multiple unfavorable factors, can the paint market 'hold' the price in the fourth quarter?

In the second half of this year, it is quite different. Especially after August, the scene of this kind of paint has faded out of the market. Instead, the slowdown in production and the slowdown in sales have been replaced. This phenomenon in the property market's "watching tide" psychological hint, despite the market did not appear to significantly reduce the price of paint, but the demand has appeared some wilting.

'Jinjiuyinshi' paint business is very hurt In addition, the fact that the paint industry has been hit hard is: the traditional 'golden nine silver ten' does not bring the expected 'big cake' for the industry. The signs that paint prices continued to rise throughout the first half of the year have also begun to cool down. On the one hand, the 'big brands' and 'foreign coatings' have hit domestic small and medium-sized brands and caused sales pressure. On the other hand, more small businesses, especially non-regular paint workshops and 'cottage paints' that have repeatedly prohibited the use of low prices The dumping of rural and township enterprises has caused some paints to use the 'low-price market' strategy or gift discounting ideas. Under the total pressure, people in the industry clearly felt: 'Paint prices can't hold up! '

The shortage of funds increases the pressure on the paint. However, the reason that the paint manufacturers can't hold up is because of financial pressure. The government's efforts to regulate and control continue to strengthen, and the tightening of monetary policy has made it more difficult for small and medium-sized paint companies to obtain credit. To make matters worse, the capital market has suffered from the recession caused by the US subprime mortgage crisis. The stock market has shrunk by nearly 50%. Even in the capital market, it is difficult for the paint industry, where the investment rate of return is not considered a huge profit. It's getting bigger and bigger. In contrast, before last year, many paint companies were blindly optimistic, and they were all overwhelmed, and many companies even expanded their liabilities to build factories. One side is the expansion of debt, one side is the financing obstacles, and the expected peak sales of paint in the third quarter did not reach the ideal sales volume. The fourth quarter was also the off-season of the paint industry, and the fund recovery was difficult. Under internal and external problems, there are paint companies that have no choice but to put further pressure on dealers, require distributors to purchase more goods, and make quick paybacks, and use a 'low-cost' strategy in order to sell products quickly and return funds as soon as possible. Heavy financial pressure.

Another point that needs to be pointed out is that the expected slowdown in GDP growth, the persistence of inflation, and insufficient confidence in the prospects for the development of the paint market in the fourth quarter. Although there is a paint company's latest statement: 'Although the original price of titanium dioxide has been significantly reduced, but the labor costs are still high. The paint industry is already a meager profit. The drop is lower and it should not drop again. 'But there are also dealers admitting:' Compared with the off-season in previous years, the same is non-profit, promotion, and the results are not satisfactory. Under such market conditions, the small price of paint should be reasonable.