Recently, a number of listed paint companies have released the 2017 semi annual report. The report shows that due to rising raw material prices led to a number of corporate profits decline, some paint companies net profit cut directly.
It is understood that the environmental supervision and superposition, cyclical factors such as price increases in 2017, has become the main theme of the chemical industry. However, this round of price increases is grad. For example, affected by the upstream prices, paint companies are injured.
Excessive price increase of upstream raw material
Titanium dioxide, solvents, TDI and other coatings are the main raw materials.
Since last year, the price of titanium dioxide has been rising all the way, while prices have risen sharply this year.
As the price of raw materials continues to rise, the operating costs of coatings enterprises are constantly improving, which seriously compresses the profit margins of the coating enterprises.
The Profits Decline/Slipped
Due to the price of raw materials and labor costs rises, and the average selling price falls, they lead to the profits decline
Huge Transition pressure
In July, the Ministry of environmental protection, considered and adopted the “”13th Five-Year “volatile organic pollution prevention and control work plan”, paint industry has become the focus of remediation object.
Therefore, the insiders of paint industry said, more stringent environmental standards, environmental protection and emission permit system will be fully activated, sewage charges will also be fully implemented in next step. This means that the paint companies do not upgrade, or in accordance with the traditional mode of production and way of waste management, is likely to face the danger to be fined or shut down,due to the discharge qualified.