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Tapping the market will slowly eliminate high-cost capacity

This year, tapping machines tightened manufacturing investment, the impact of the international financial crisis, tapping machine tool industry profit growth, profitability weakened trends. According to the survey, tapping machine industry sales growth rate showed a significant decline, new orders for growth enterprises accounted for 76.6%, orders in hand were negative growth of enterprises accounted for 86.1%, the greatest declines even to 84%, which means a considerable part of the tapping machine enterprises stopped production at the all four quarters may face difficulties or even bankruptcy.
    in October this year reported China's tapping machine tool industry sales overall sharp decline in output in the first 9 months. Among them, cutting tools manufacturing, tapping machine attachments manufacturing, other special purpose tapping machine equipment manufacturing industry's growth rate is high, fell 34.86, 26.34 per cent growth respectively and 27.05%. From the output of major products, October 7 products of tapping machine tool industry in China overall downward trend, tapping machine CNC equipment declined, down by 62.75%.
    tapping expanding demand, economic recovery short cycle may be extended. But in the case of tapping machine is not a major rebound in demand, grinding capacity phase will continue, industrial prices again.
    December HSBC China PMI initial tapping machine industry is 50.9, a 14-month high, the tapping machine industry recover kinetic energy increase. In particular the new orders index hit a 20-month high, PMI index return of recovering demand support, has certain sustainability but still excess capacity in tapping machine, in the case of no significant upturn in demand, mill capacity phase will continue, tapping the market will slowly eliminate high-cost capacity, this process will be long. PMI from the recovered 0.4%
12 months, stronger than seasonal, this has been going on for 4 months. Historical data show that in 2006-2011 in December, the HSBC PMI rose by an average of 0.1% per cent. December PMI at the downs above the line and hit a 14-month high of tapping machine rebounded stronger than seasonal, the kinetic energy of the tapping machine industry rebound strong.     indicators, tapping demand, output slowed. December new orders index hit a 20-month high, pushed the PMI index rebound, tapping demand has accelerated, and stronger than seasonal. 2006-2011, the new orders index was flat from the December. Among them, the index for new export orders down slightly, indicating that better domestic demand recovery in external demand. Tapping on the PMI index rebounded on a demand basis, its sustainability is stronger.
tapping machine output growth is slowing. Output in December fell from 0.8% to 50.5%, still flourish on the line, that tapping machine industry keeps growing, but growth fell back. November industrial prices fell per cent, knocked out some high-cost production, resulting in tapping machine production slowdown. A new order index and output index rose down, pressure on our purchase price, product prices will gain traction. December PMI finished essentially flat prices, and tapping machine purchase price index slightly down.
    the past three years, tapping large capacity of the enterprise investment, led to the current overcapacity problem is very serious, in order to dilute depreciation and financial costs, tapping machine needs to maintain a certain production scale of enterprises. Once the prices of manufactured goods rose, tapping machine production could soon increase, supply will again drive down prices of industrial products, such as the October PPI rose to positive in November, the HSBC PMI output index is higher than the new orders index, PPI rose fell again when prices fall, as some of the tapping machine manufacturer high marginal cost of production, supply growth fell, again balancing of supply and demand, prices stabilized. New orders index in December, for example, tapping machine output index falling product prices by the support.
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