For the refrigerator industry in the deep adjustment period, one of the highlights of development in recent years or one of the focus of everyone's attention is export. The export volume of refrigerators (using compressor refrigeration) has been increasing year by year since 2009, until 2017. It has grown continuously for 8 years and has a compound annual growth rate of 7.8%. In 2018, the export volume of Q1 refrigerators ended the trend of continuous growth for many years, with a year-on-year decline of 3.5%, with a drop of up to 12% in March. Is the inflection point of the refrigerator exit really coming?
Turning point at the exit
There are many factors that affect the export of the refrigerator industry. External environment such as the development of the global economy, national economies, policies, tariffs, domestic demand, employment rate, standard access, etc.; internal is affected by GDP, domestic policy, exchange rate, industry production scale, development status, product cost and technological development Level and other effects. In the past 8 years, in the relatively good economic environment of the world, the refrigerator industry has grown rapidly. With the support of national policies, the products have matured and relatively low prices have won orders from all over the world. 2017 China The overall export volume of refrigerators reached 30.22 million units, and exports increased by 12% year-on-year, accounting for 31% of the world's regions except China.
In the first quarter of 2018, exports declined. The most intuitive reason is the increase in prices. The rise in raw materials and labor costs in the past two years have caused the continuous increase in the cost of refrigerators. Together with the continued appreciation of the renminbi, it will not lead to 2018. Less companies have increased export unit prices with buyers, and the increase in prices has affected the increase in orders, especially in areas that are sensitive to price changes.
From the perspective of the sub-continent, the export volume of refrigerators in Oceania and Africa was the most serious, which was greatly affected by the increase in unit price. The export volume of Oceania fell by more than 11%, mainly because of the small base and the weak Australian housing market in 2018. Slow income growth and higher debt levels have further slowed consumption growth, and some companies have lost some orders in the process of opening up the market. In Africa, it is more simply affected by price increase factors. After many African countries adopted reform measures to adjust macroeconomic imbalances and stimulate investment in 2018, many regional economies in Africa have seen a recovery growth. South Africa's export performance in the first quarter was relatively good, and Nigeria also had some recovery growth, but Algeria continued to fall sharply.
Europe is the continent with the largest average unit price growth (the average unit price has increased by 18%) but the decline in exports is the main reason. The main reason for this situation is that Europe is currently the largest exporter of refrigerators in China, and its exports account for China. Nearly 40% of the world's exports are also nearly a quarter of Europe's entire consumer market. It is not a short-term solution to transfer so many orders from China to other regions. In addition, Chinese export companies are also adjusting their product mix to larger volumes. The change in direction has also driven the growth of the average unit price to some extent. In the first quarter, refrigerators exported to Italy, Russia, Greece, Ukraine and other places to grow more, while the traditional export of heavy land and the law fell significantly.
From the perspective of China's exports to the US in the first quarter, the increase in export unit price of 13.3% is still the main reason for the decline in export volume by 12.4%. The refrigerators were not included in the proposed tax list announced in April. Industry Online believes that even if there is any change in the future, the possibility of adding high tariffs to refrigerator products as consumer goods is relatively low. From the perspective of the Americas as a whole, the decline in export volume is relatively small. The countries such as Canada, Mexico, and Peru in the Americas have performed more prominently, and their export growth has exceeded 30%.
Due to its proximity to China, transportation costs are relatively low and its acceptance of Chinese products is relatively good. In the first quarter, exports performed best, basically the same as last year, but the average unit price growth was the lowest among several continents. The reason is that compared with other continents (except Oceania), China exports more than 200L products in Asia, and the price profit is relatively good. In addition, transportation costs have certain advantages, but this also led to the least growth in Asia in the first quarter, only 2.2%. In the Asian region, emerging markets such as Southeast Asia have always been the focus of attention. Apart from a few poor performances such as Thailand, Bangladesh, Indonesia and Cambodia are all hot spots of recent concern.
After the average unit price increased by more than 12%, the price advantage of China's export products was greatly weakened. Some orders were transferred to Turkey and Southeast Asia, which also produced small and medium-sized refrigerators. In the first quarter, production in Turkey increased by more than 10%. On the whole, although the export volume is declining, the average unit price and export volume have increased to varying degrees. This is not necessarily a bad thing for the refrigerator industry. Refrigerator companies can take this opportunity to adjust the product structure. The low-end development towards the mid-to-high end also stimulates Chinese companies to go abroad and lay out in areas with lower overseas costs.
China is a big country in the production and export of refrigerators. The impact of the energy efficiency of overseas refrigerators on China's exports is also quite large. Refrigerator companies need to pay close attention to the energy efficiency of various countries. In response to the energy crisis, reducing greenhouse gas emissions, raising people's awareness of energy conservation and promoting energy-efficient products, and in order to protect their own interests, more and more countries have formulated nationally appropriate policy standards, or updated to more stringent Mandatory technical standards to limit the import of products that do not meet energy and environmental standards. In 2017, the US FTC updated and implemented the energy efficiency labeling regulations for refrigerators, Qatar released the performance requirements for refrigerators, and Ukraine approved the energy efficiency labeling rules for refrigerators. In 2018, there were some new changes in the energy efficiency of refrigerators in Australia, Saudi Arabia and Malaysia. In addition, the EU's new refrigerator freezer energy efficiency regulations are also being drafted.
The “Belt and Road†region is growing rapidly
What deserves special attention from Chinese companies is the “Belt and Road†region, which is mostly emerging economies and developing countries. It is generally in the period of economic development, and the demand for refrigerator products is also growing. According to industry online statistics, in the first quarter of 2018, the total area of ​​China's refrigerator exports in the “Belt and Road†region was 1.513 million units, an increase of 18.9% year-on-year, far exceeding the growth rate of non-“Belt and Road†regions by 4%. The speed is as high as 18.6%, which is more than three times faster than the non-“Belt and Road†region.
The “One Belt, One Road†region of China's refrigerator products not only has a rapid development in export volume, but also has a better export unit price than the non-“One Belt, One Road†region. In the first quarter of 2018, the average unit price of “One Belt, One Road†regional refrigerator products is US$153.5/ Taiwan, on average, is 4.5 US dollars/unit higher than the non-“One Belt, One Road†region. From the perspective of unit price changes in the past two years, the unit price of “One Belt, One Road†region has increased by 14% year-on-year, and its performance is also better than that of non-“Belt and Road†regions. .
The “One Belt, One Road†regional products export countries have different performances. Among the top ten countries, the fastest growth is 73.3% in Bangladesh, 37.2% in Russia and 20.8% in Iran. Bangladesh is a hot spot that everyone is paying attention to recently. In addition, due to the advantages of labor cost and relatively stable policies, Industry Online has learned that many domestic enterprises are investigating the feasibility of the layout in Bangladesh. In addition, some local enterprises are already preparing to invest and build factories this year. Russia and Iran have been growing steadily for two consecutive years due to the recovery of the domestic economy. This year's World Cup in Russia has stimulated the consumption of refrigerators and other home appliances to some extent.
For the future, as far as the situation of the Spring Canton Fair is concerned, the company reflects that due to factors such as exchange rate fluctuations and rising raw material prices, buyers are cautious in placing orders, but the intention of buyers along the “Belt and Road†countries is increasing, and the overall price increase is painful. Export orders may stabilize afterwards.
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