Current situation and countermeasures of China's magnetic materials industry

I. Overview

 

In 2008, the US subprime mortgage crisis and the subsequent global financial crisis spread to all countries in the world and disrupted the normal economic order in the world. Affected by the world economic and financial crisis, China has maintained its economic growth momentum for many years, and the deceleration momentum has exceeded expectations. Magnetic materials, as China's advantageous export products, have been severely hit by the rapid decline in the European and American consumer markets, and the industry situation is extremely grim. However, there are many opportunities hidden in this dangerous industry downturn. Therefore, it is apparent that enterprises in the magnetic materials industry keep abreast of the domestic and international economic and industry situations and market trends, grasp the direction of market development, practice internal skills, and respond to market changes. Especially important.

 

2. The current situation of China's magnetic materials industry

 

At present, China is already a veritable big country of magnetic material products and a global manufacturing base of magnetic materials, with nearly half of its exports exported. Since the third quarter of 2008, China's magnetic materials industry has been affected by the global financial crisis. It has become increasingly apparent that the whole has entered a low season and a depression period. After entering the fourth quarter, the orders of material companies have suddenly dropped sharply, and the production lines of the companies have stopped production by more than 50%. Most of the companies have not started production. A few companies have closed down. The magnetic industry has entered a long and painful " "Winter" season. According to the statistics of our association, since the second half of 2008, member units across the country have reported that foreign orders have decreased significantly and exports have dropped significantly, especially in the fourth quarter. The main reason is that the continuous appreciation of the renminbi in recent years has caused a lot of exchange losses to magnetic product export companies; under the weak dollar environment, raw material and energy price fluctuations have caused great difficulties to the production management of enterprises; coupled with the increasing global financial crisis, magnetic products The export suffered a second cold snap; the two international giant soft ferrite giants TDK and EPCOS have joined forces to bring a strong impact on the export of the domestic soft ferrite industry to the European and American markets, making China's soft ferrite industry encounter more than other types The magnetic material industry has never experienced greater difficulties.

Most domestic enterprises are engaged in the production of conventional low-end products, and export has certain advantages, but there is no obvious advantage and competitiveness in the domestic market. The production of many such enterprises has now fallen by more than half, and most of the factory equipment is idle and workers have nothing to do. Some enterprises have even ceased production, and a few enterprises have collapsed due to the complete breakdown of the capital chain, and they have no confidence in the market and are unable to support and maintain. The overall situation of the magnetic industry is already very grim. From the perspective of the impact of the industry classification of the entire industry, the soft ferrite industry is the most affected, followed by the permanent magnet ferrite, neodymium iron boron permanent magnet, raw material, auxiliary material production enterprises, special equipment, instrument manufacturing industry; but currently There are also a very small number of small and medium-sized enterprises (about 10%) that still insist on full-line production. Such enterprises are mainly enterprises with advantages and competitiveness, but the market size is small, the export ratio is very small, and they can adapt to the market flexibly. About 40% of the enterprises reduced their production by nearly half, and nearly 30% of the enterprises reduced their production by more than half. Special equipment and equipment manufacturers were relatively less affected by the market in 2008, but will be clearly reflected in 2009.

Since China's magnetic materials products are mainly low-end and mid-range, domestic competition is fierce, especially in recent years due to the sharp rise and fluctuation of energy, raw materials, labor costs, resulting in rising manufacturing costs, enterprise cost management and cost control difficulties, industry companies generally present The situation of increasing volume and decreasing profits. On the other hand, due to the outbreak of the US financial crisis, the global economy is weak, the RMB continues to appreciate, the domestic capital market is sluggish, the housing market is sluggish, and investment and consumption are inhibited. Exports in the second half of 2008 have dropped significantly, which has caused considerable damage to the current Chinese magnetic materials industry. The great pressure has seriously restricted the development of domestic national enterprises. It is expected that the magnetic material industry will be the most difficult year in 2009.

 

3. China's magnetic materials industry's countermeasures

 

The two sides of things are also reflected in the current financial crisis. Although the current financial and economic situations at home and abroad have a greater impact on the magnetic industry, making many companies in a difficult situation, but this situation also hides some rare Opportunity.

1. Objectively understand the "danger" and "opportunity" in the crisis

In fact, although we do not yet know how long this crisis will last, and we cannot accurately assess how severely China has been affected by this crisis, or even how to turn it into danger, because it is too unpredictable. But if we look at the crisis from another angle, as far as the crisis itself is concerned, there must be "opportunities" at the same time as "crisis". How to seize the "opportunities" with "danger" is the correct attitude towards the status quo . If you look farther and look back on the human history of the past 100 years, the economic crisis always occurs once in a while. This is the development of the economy to a certain extent. The self-destruction, self-repair and reconstruction of the economy itself after the accumulation of contradictions Process, this is the inevitable law of economic and social progress. Moreover, each crisis naturally has its own process of gestation, growth, destruction, and demise. It is very likely that while the economy is prospering, it has already buried the roots of the future crisis. This is actually a dialectical materialist view. Speculation on the economic crisis. If such an analysis method is adopted, we will find that the rescue of the crisis must be accompanied by a future revival, as is the magnetic industry.

Since the beginning of the last century, there has been a small-scale crisis almost every three to five years in the world. The major crises affecting the whole world are generally between 30 and 40 years apart, and because the last century is the century led by the United States, The crisis is generally related to the United States. If the huge economic damage caused by the two world wars is not counted, the secondary crises that have the greatest impact on the magnetic industry are the energy crisis of the 1970s and the current global financial and credit crisis caused by subprime mortgages.

However, in this crisis, the economic recession is "dangerous". From the perspective of the current magnetic industry, the company's tight funds, the shrinking market leads to lower orders, rising labor costs, strong technical staff mobility, raw material price fluctuations, and the company's product structure cannot adapt. New market changes, fierce market competition, changes in the exchange rate of the RMB, etc. are all difficulties and situations facing enterprises in the industry. The difficulties in exports, the sluggish domestic demand market and the decline in sales will continue in the short term. What is the "machine"? In fact, the answer is already there. When Western countries and people change their overdraft consumption and development model in the future, the new model will promote new markets, depending on who is the first to take the initiative and seize the opportunity. For the magnetic industry, in the actions of countries in the world to deal with the crisis, in the competition for the survival of the fittest in the industry, there are many opportunities for mergers and acquisitions, opportunities to attract talent, and policy market opportunities. Who can effectively save themselves in this crisis, through Merger and integration strengthens strength, implements long-term resource and talent strategies, integrates, develops and taps new technical resources, market resources, customer resources, and seizes market opportunities led by policies. Who is the strongest in the industry.

2. Countermeasures and suggestions to deal with the crisis

①Strengthen the education and training of employees, let them understand and understand the situation, share hardships with the enterprise, advance and retreat together, share the difficulties with the enterprise, and overcome the difficulties together.

②Strengthen the research and analysis of the market, grasp the policy direction and market opportunities in the predicament.

③ Adjust product and service strategies, optimize channel coverage strategies, adjust product marketing strategies, optimize and adjust resources according to changes in domestic and foreign markets, and avoid market risks as much as possible.

④Enterprises with a relatively large proportion of exports should actively develop the markets of developing countries and China's domestic demand market, and adjust the product structure to the European and American markets to improve product competitiveness and innovation capabilities.

⑤Save strength, seize opportunities to develop and strengthen yourself, integrate various resources, and combine various forces to lay a foundation for future development.

 

4. Future market environment changes and market trends

 

1. Changes in the foreign economic environment

With the continuous introduction and implementation of a series of powerful bailout measures led by the United States and other European and American countries, although the European and American markets and economic environment are still deteriorating, the speed has slowed down, especially when the new US President Barack Obama came to power. The financial think tank will play a role in the recovery of the US economy, and the obvious bailout effect will appear in the next two to three years. It is expected that the US financial market will end its oscillation in the second half of 2009 and tend to stabilize, and the economic situation in 2010 will improve.

2. Domestic policies and market environment

① Ten measures of the State Council to expand domestic demand and invest 4 trillion yuan by the end of 2010, and have successively launched industry revitalization plans, benefiting relevant companies in the industry;

②The central bank cut interest rates five times in 2008, and the monetary policy changed from tightening to stable and loose, which is conducive to improving the tightness of corporate funds;

③Home appliances go to the countryside to boost domestic demand, which is conducive to the steady growth of the domestic consumer electronics application market;

④3G was released in January 2009 to promote the development of 3G communication application industry;

⑤ The reduction of the purchase tax on small-displacement vehicles stimulates the automotive and automotive electronics application markets.

It can be expected that the country will also introduce a series of policies to ensure the steady growth of China's economy and the domestic market will continue to improve.

3. The future market trends of magnetic materials

From the overall view of the current magnetic industry, due to changes in the domestic and international financial and economic situations, the rapid growth of the magnetic material industry as in 2007 will be difficult to see in the next three years. In January 2009, stimulated by factors such as strong short-term sales in the Chinese New Year consumer electronics, especially the rural market, and 3G communications, most of the magnetic materials companies in the early stage also recovered due to insufficient inventory, and some small orders can be made, but this is only temporary. In the first half of 2009, it will be a trough in the development of the entire industry. It is expected to appear around March. Afterwards, due to the domestic demand in the consumer electronics market and the development of communications and the new energy saving and environmental protection market demand, the internal magnetic industry will fluctuate. It is slowly recovering from the oscillation, but due to the large proportion of China’s foreign market for magnetic materials, the industry’s return to comprehensive and rapid development will still rely on the improvement of the European and American markets and the growth of exports. Among many types of magnetic materials, the NdFeB permanent magnet industry will have a more prominent performance.