China: Raw Material Prices Down for Seven Consecutive Weeks
According to the Ministry of Commerce as of the end of June prices of raw materials used in manufacturing including timber have fallen for the past seven weeks.
Prices for steel were down 0.4% prices for agricultural materials dropped 0.1% prices for building materials declined 0.9% of which glass, timber and cement fell 1.7%, 1.1% and 0.6% respectively.
Too many furniture stores
According to recent estimates, since August 2011 twelve mega home furnishing stores have closed in China and over the past six months a further eight large stores have closed.
In addition, another five mega stores are about to relocate. The closures and relocations are in response to the cooling of the property development boom which began in 2010.
The China Furniture Association has calculated that for every 10,000 sq.m of furniture store floor area annual sales are in the region of yuan 100 mil.
Thus, to service domestic furniture demand for yuan 20 bil. (2012 figure) the ideal floor space in the retail sector should be around 20 mil. sq.m. but the total area of current domestic home furnishing stores exceeds 40 million sq.m.
If the furniture retail sector does not change then 50% of the retail floor area is likely to be unprofitable.
Obstacle slow development of wood/plastic composite market
Wood plastics composite products are now used more often in China in construction, interior decoration, outdoor furniture, the automotive and transportation sectors, logistics and packaging, etc.
However, the biggest problem for further development of the market for wood/plastic products is inadequate standards and highly variable product quality which have undermined consumer confidence.
According to the China Institute for Sustainable Development, Wood Plastic Composite Materials Professional Committee it was not until 2008 that the first national standards were developed.
Following this in early 2009 the national standards €GB/T 24137 wood plastic decorative panels" and "GB/T 24508 wood plastic flooring" were prepared and eventually adopted in 2010.
At present another 6 standards for wood plastic composite materials are either being drafted or awaiting ministerial approval.
PMI indicates optimism on part of manufacturers
In July, China's manufacturing purchasing managers index (PMI) was 50.3 percent, up by 0.2 percentage point month-on-month.
The PMI for large-sized enterprises was 50.8 percent, up by 0.4 percent month-on-month; that of medium-sized enterprises was 49.6 percent, down by 0.2 percent month-on-month; that of small-sized enterprises was 49.4 percent, up by 0.5 percents month-on-month. In July, of the five sub-indices constituting PMI, four increased while one declined.
The Production Index was 52.4 percent, up 0.4% month-on-month. The New Orders Index was 50.6 percent, up 0.2% month-on-month staying above the negative threshold.
The most recent survey shows that the Export and Import Order Index was 49.0 and 48.4 percent respectively an improvement of 1.3% and 0.5% but still in negative territory.
The Production and Business Activity Expectation Index was 56.4 percent, up 2.3 percent over last month, ending a three-month downward trend. This indicates that the proportion of manufacturing companies that are optimistic on business activities in the next three months has increased.
Prices for steel were down 0.4% prices for agricultural materials dropped 0.1% prices for building materials declined 0.9% of which glass, timber and cement fell 1.7%, 1.1% and 0.6% respectively.
Too many furniture stores
According to recent estimates, since August 2011 twelve mega home furnishing stores have closed in China and over the past six months a further eight large stores have closed.
In addition, another five mega stores are about to relocate. The closures and relocations are in response to the cooling of the property development boom which began in 2010.
The China Furniture Association has calculated that for every 10,000 sq.m of furniture store floor area annual sales are in the region of yuan 100 mil.
Thus, to service domestic furniture demand for yuan 20 bil. (2012 figure) the ideal floor space in the retail sector should be around 20 mil. sq.m. but the total area of current domestic home furnishing stores exceeds 40 million sq.m.
If the furniture retail sector does not change then 50% of the retail floor area is likely to be unprofitable.
Obstacle slow development of wood/plastic composite market
Wood plastics composite products are now used more often in China in construction, interior decoration, outdoor furniture, the automotive and transportation sectors, logistics and packaging, etc.
However, the biggest problem for further development of the market for wood/plastic products is inadequate standards and highly variable product quality which have undermined consumer confidence.
According to the China Institute for Sustainable Development, Wood Plastic Composite Materials Professional Committee it was not until 2008 that the first national standards were developed.
Following this in early 2009 the national standards €GB/T 24137 wood plastic decorative panels" and "GB/T 24508 wood plastic flooring" were prepared and eventually adopted in 2010.
At present another 6 standards for wood plastic composite materials are either being drafted or awaiting ministerial approval.
PMI indicates optimism on part of manufacturers
In July, China's manufacturing purchasing managers index (PMI) was 50.3 percent, up by 0.2 percentage point month-on-month.
The PMI for large-sized enterprises was 50.8 percent, up by 0.4 percent month-on-month; that of medium-sized enterprises was 49.6 percent, down by 0.2 percent month-on-month; that of small-sized enterprises was 49.4 percent, up by 0.5 percents month-on-month. In July, of the five sub-indices constituting PMI, four increased while one declined.
The Production Index was 52.4 percent, up 0.4% month-on-month. The New Orders Index was 50.6 percent, up 0.2% month-on-month staying above the negative threshold.
The most recent survey shows that the Export and Import Order Index was 49.0 and 48.4 percent respectively an improvement of 1.3% and 0.5% but still in negative territory.
The Production and Business Activity Expectation Index was 56.4 percent, up 2.3 percent over last month, ending a three-month downward trend. This indicates that the proportion of manufacturing companies that are optimistic on business activities in the next three months has increased.
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