◎ Yang Honghui
| On July 15, it is learned by China Rubber magazine at the 2020 Secretary-General’s Work Conference held by CRIA that COVID-19 has a great impact on China’s rubber industry. According to the statistics of CRIA, except for latexes industry, the cumulative economic operation data of the industry in the first five months showed a downward trend. |
At the same time, however, secretaries-general of most industry branches stated that in Q2, especially since May, due to the improvement in production and sales situation of automobile and other industries, the economic operating environment of most rubber subdivided industries gets better, and the quarter-on-quarter data shows a positive trend, indicating that the domestic market has recovered well. However, due to the normalization of epidemic development and the continued spread of epidemic overseas, the export of rubber products and the industrial supply chain are still facing tremendous pressure, and the development of the industry still faces many difficulties and uncertainties in the second half of the year.
According to CRIA’s statistics, from January to May, the decreasing amplitude of rubber industry’s industrial output value at current price and sales revenue showed a narrowing trend. According to statistics from 354 key member enterprises in industries of tires, cycle tires, rubber hoses & belts, rubber products, rubber shoes, latexes, carbon black, comprehensive utilization of waste rubber, rubber machinery moulds, rubber chemicals, and framework materials, the total realized industrial output value at current prices decreased by 15.76% year-on-year (the same below), a decrease of 15.84 percent points; sales revenue decreased by 16.32%, a decrease of 15.86 percent points; realized profits and taxes decreased by 21.67%; realized profit decreased by 25.89%; profit margin of sales revenue was 5.20%, a decrease of 0.75 percent points; there were 63 loss-making enterprises, with the number of loss-making enterprises increasing by 36.96%, and the amount of losses increasing by 123.42%; and the inventory of finished products increased by 6.10%.
In the first five months, the production and operation of latexes industry outshone others. Among the subdivided specialties calculated by CRIA, only the industrial output value at current price and sales revenue of latexes specialty achieved positive growth.
From January to May, the decreasing amplitude of export delivery value of the industry counted by CRIA continued to expand, with a decline of 17.98%, a decrease of 19.26 percentage points; the export rate (value) was 32.16%, a decrease of 0.65 percentage points. Among the subdivisions counted, the export delivery values of three specialties of rubber hoses & belts, latexes and rubber machinery moulds have achieved positive growth.
According to Shi Yifeng, Secretary-General of Tire Branch, since May, although tire exports are still experiencing difficulties, the domestic OEM and maintenance & replacement markets have improved significantly. In particular, OEM markets for truck & bus and OTR tires are awesome, domestic infrastructure construction starts to increase, logistics and transportation gradually recover, and tire enterprises have adjusted their product lines to domestic market in time.
Shi Yifeng believes that the current problem in tire industry is that the epidemic has caused a sharp decline in market demand, therefore, the contradiction of structural overcapacity has become more prominent; tire exports are highly dependent, and the epidemic has a long-term impact, causing the impact on domestic funded passenger car tire enterprises even more serious; with reduced demand, reduced production capacity utilization, reduced product prices, high inventories and tight budget, it is difficult for enterprises to sustain for too long; trade frictions have intensified and have developed into countries and regions where domestic enterprises “go global”; and policy issues, such as high tariffs on imported natural rubber and one-size-fits-all environmental protection, are not conducive to fair competition and scientific development of the industry, and policy support is urgently in place as soon as possible.
According to Chen Zhihai, Secretary-General of Cycle Tire Branch, entering May, the domestic epidemic has basically been effectively controlled, and social and economic activities and daily life of the public have gradually returned to normal. The market demand for cycle tire products (including bicycle tires, motorcycle tires and electric bicycle tires) that related to production activities and daily life is gradually returning to normal, and it is expected to maintain a positive development trend in the second half of the year. However, it is estimated that it will take some time for the production of foreign trade enterprises to return to normal levels.
Li Hong, Secretary General of Hoses & Belts Branch, says that from the statistics data of key enterprises in May, the total industrial output value, industrial sales output value, product sales revenue, profit, and total profit and tax of rubber hoses & belts industry are still in a downward trend, but the decline is lower than that of January to April. At present, the production and operation of rubber hoses & belts industry has basically returned to normal, but the profitability of enterprises has not yet returned to its original level.
Song Yan, secretary-general of Rubber Products Branch, says that compared with the previous four months, the increase amplitude of export delivery value of rubber products in May showed a continuous downward trend, with a month-on-month decrease of 3.54 percentage points, but the total industrial output value, sales revenue and total profit all showed signs of month-on-month recovery, with the increase amplitudes increasing by 2.76, 1.71 and 8.73 percentage points respectively.
Wang Gang, Deputy Secretary-General of Rubber Shoes Branch, analyzes that according to statistics data in May, as the domestic epidemic gradually eased, enterprises gradually resume normal production, but there are still 2/3 member enterprises whose production capacity has not reached the level of the same period of the previous year; and the epidemic is still serious overseas, therefore, foreign trade enterprises have been more affected.
In the first five months, the economic operation data of latexes industry was the most “beautiful” among rubber subdivided industries. This is mainly because medical and protective gloves are important anti-epidemic materials. The interests of medical latexes products manufacturers were also reflected maximally in this epidemic. Their operating data has increased the industry average data and also covered up the actual situation of most troubled enterprises. According to Tu Yanling, Secretary General of Latexes Branch, except for medical latexes products enterprises, other latexes products enterprises have encountered unprecedented difficulties, such as condoms, household gloves, industrial gloves and other enterprises.
In addition, Tu Yanling also says that latexes products from Malaysia and other countries are currently expanding their market in China. Among them, the import price of vulcanized rubber surgical gloves from January to March dropped by 7.58%, and the import volume increased substantially by 47.20%, indicating that foreign latexes products enterprises are seizing the market in China with their production capacity advantages, and middle and small-sized enterprises in China are under increasing pressure to survive.
