The current competitive landscape in the refractory industry is complex and changeable

The severe overcapacity in the industry, the decline in refractory raw material prices in the first quarter, the decline in the efficiency of steel mills, and the obstruction of some export products due to the epidemic have caused the current complex competition in the domestic refractory market. Industry self-discipline, group warmth, and overcome difficulties together are the common voices of refractory companies.

The long-standing serious overcapacity in the industry, the low industrial concentration, and the large number of market players are problems that have existed in the refractory industry for many years. In recent years, due to various factors such as the country's encouragement of enterprise transformation and upgrading, enterprises entering the park, energy saving and emission reduction, on the one hand, the equipment level of the industry has been greatly improved, and the face of refractory companies has been changed, but it has also caused further expansion of production capacity. excess. The current competition subject and pattern are complex and changeable, with behaviors such as "competition below cost" appearing. Small companies are actively striving for the market for large customers, and large companies are also actively seizing the market for low-end customers. The downward changes in refractory raw material prices in the first half of the year have gradually spread to product companies, and the comprehensive effect has already appeared. In addition to the relatively stable market prices of high-aluminum raw materials and high-aluminum and silicon products, the market prices of many products in the first half of the year have fallen sharply, and the prices of alkaline products and special refractory materials have dropped significantly. In the bidding business, the phenomenon of winning bids below the cost price often occurs. For example, the ex-factory price of magnesia-calcium brick products is currently far lower than the cost price. Some steel mills require a reduction of about 20%, which far exceeds the profit level and affordability of refractory products companies. Companies that produce magnesia raw materials and those with a higher proportion of alkaline products face greater market pressure. The association called for strengthening industry self-discipline, overcoming difficulties together, and jointly resisting market competition behaviors below cost.

In 2020, the refractory industry is under pressure and challenges

The China Refractory Industry Association survey found that some refractory products enterprises with higher product grades and customer grades were not greatly affected by the epidemic in the first half of the year, and their operating conditions and profit levels were significantly better than the industry average. This shows that the market Resources continue to be concentrated in advantageous enterprises. As the staged results of epidemic prevention and control have been further consolidated, the country’s macro policies to hedge against the impact of the epidemic have increased, the proactive fiscal policy has become more proactive, the prudent monetary policy has become more flexible and appropriate, and the reform of the market-oriented allocation of factors has been further deepened. "The effects of the "six guarantees" policy measures are gradually emerging, which will provide a favorable external environment for the refractory industry to promote high-quality development, and advantageous companies will still have better development opportunities.

The operation of the industry in the first half of the year showed that the refractory industry has withstood the test of the new crown pneumonia epidemic. After the outbreak of the new crown pneumonia, the China Refractory Industry Association and the entire industry have resolutely implemented the spirit of General Secretary Xi Jinping’s important instructions and the decisions and deployments of the Party Central Committee, the State Council, the China Iron and Steel Industry Association, and governments at all levels where the company is located. At the same time, strive to ensure the normal operation of the industry's production and operation. In the first half of the year, there were no cases of refractory supply shortages affecting the production and customer demand of steel, building materials, non-ferrous metals and other industries.

2020 will be a challenging year for the refractory industry. Changes in the demand side of the market, the downward price of raw materials and products, and the resonance of the domestic and foreign markets are common challenges faced by the entire refractory industry. Do everything possible to maintain market stability is the common wish of the refractory industry. China Refractory Industry Association calls on member companies not to blindly increase production capacity, strengthen industry self-discipline, oppose vicious competition, and form a joint force to maintain market stability. China Refractory Industry Association will work with all member companies to strengthen communication with upstream and downstream industries, uphold the concept of mutual benefit, win-win and mutual support, strengthen industry chain coordination, and jointly maintain a fair, just and stable market order, and overcome difficulties together. Work together for the high-quality development of the refractory industry.