(Source: China ceramic net)

Since last year, impacted by the rapid rise in costs, some Ceramic and sanitary ware  enterprises have protected themselves with small price increases. Unexpectedly, due to the well-known conflict between Russia and Ukraine, the price rise of natural gas has become the "accidental fuse" and "best excuse" for the justified price rise of Ceramic and sanitary ware products.

Beware of "price rise" as a gimmick! How do ceramic enterprises operate under the cost "roller coaster"?

With the continuous popularity of medium board products in the northern home decoration market, the medium board production capacity in Zibo production area is increasing. Recently, in Zibo production area, Jinyi, Yuancheng, Lianzhong and other manufacturing enterprises are making technical transformation of medium board production line.

In the early years, some Ceramic and Sanitary ware enterprises have said that the rising cost has seriously squeezed the profit space, but due to market competition, overcapacity and other reasons and pressure, they follow the trend of product price rise and stagger forward for fear of affecting the market sales.

Since last year, impacted by the rapid rise in costs, some Ceramic and Sanitary ware enterprises have protected themselves with small price increases. Unexpectedly, due to the well-known conflict between Russia and Ukraine, the price rise of natural gas has become the "accidental fuse" and "best excuse" for the justified price rise of Ceramic and Sanitary ware products.

01. The rising price tide affects the global ceramic industry

Italian ceramic enterprises should be ready to "cut off gas"

This price rise tide has multiple intertwined and superimposed factors, including internal factors accumulated for many years, external factors encountered unexpectedly, and sparks ignited unexpectedly, which makes this price rise tide have a wide range, strong momentum and far-reaching impact.

The rise in energy prices represented by natural gas and oil is global. It is reported that due to European and American sanctions on Russian natural gas, which has dragged down the Italian ceramic industry, they should not only bear the soaring natural gas price, but also prepare for the worst possible "gas cut-off" at any time. In addition, Spain, India, Poland and other ceramic industries are also affected to varying degrees by the rise of natural gas, raw materials and oil prices. Domestic Ceramic and Sanitary ware enterprises failed to protect themselves, which directly led to the collective price rise of almost the whole industrial chain, including home building materials enterprises.

Soaring costs, rising product prices and intensified competition have become a new opening mode this year. In addition, the current epidemic come back in many places across the country , which makes it difficult for the production and operation of Ceramic and sanitary ware industry.

As one of the representatives of "kiln industry", Ceramic and Sanitary ware industry is a traditional large energy consumer. It relies on burning coal, oil and gas to maintain production. From the analysis of the energy structure of coal, oil and gas, they are all non renewable resources, and pollutants are inevitably discharged during the combustion process, so they are listed as the key focus of emission reduction and carbon reduction. Especially under the policy guidance of energy conservation and emission reduction, green transformation and high-quality development, as well as the strategic objectives of carbon peak and carbon neutralization, the curse of environmental protection has been added layer by layer and closely linked.

Ceramic enterprises often stop production, limit production or even eliminate due to environmental protection, which casts a lot of uncertainty on the normal production and operation of the enterprises. Due to the supply problem, the natural gas price fluctuates and even "breaks", the instability increases, and the enterprise cost and profit often "ride a roller coaster".

02. Electricity, hydrogen energy

The industry actively explores energy transformation

Ceramic and Sanitary ware enterprises have been widely questioned because of the "unfathomable water depth" of product prices, and product competition once became popular with the "label" of price war for many years. The price rise of products is the normal behavior of the enterprise and the instinctive response to the change of external costs. However, Ceramic and Sanitary ware enterprise is secretive about the price rise and has been looking for reasonable excuses and opportunities to pave the way for the price rise of products.

The fulcrum of this product price rise event - the soaring price of natural gas, not only touched the sensitive nerves of Ceramic and Sanitary ware industry, the dependence on energy and the severity of "double carbon" and "double control", but also triggered Ceramic and Sanitary ware enterprises’deep vigilance to the energy revolution and energy crisis, as well as the propositions of cost and survival derived from the price rise.

The energy crisis has both a supply gap and record prices. As a worldwide problem, many Ceramic and Sanitary ware enterprises around the world are exploring new ways to solve the energy crisis. Some industry authorities said that in the future, electricity will replace coal and natural gas and become the main energy force of Ceramic and Sanitary ware enterprises, which is not only conducive to the realization of the "double carbon" goal, but also will become the breakthrough of Ceramic and Sanitary ware enterprises' energy revolution and the focus of equipment innovation.

At present, more and more Ceramic and Sanitary ware enterprises have begun to cooperate with photovoltaic power generation construction enterprises in an attempt to reduce their dependence on coal and natural gas power generation. The new generation of equipment innovation represented by electric kiln and the process and technological innovation with electric power as the main energy structure are in full swing. In addition, enterprises take hydrogen energy as the research direction of kiln energy substitutes, and some enterprises pilot to replace natural gas with "green hydrogen" energy to achieve energy conservation and emission reduction.

03. Beware of "price rise" become a gimmick

Whether the price increase is realized by accident is a blessing or a curse. Enterprises only rely on rising costs and simply adjust prices, do not add value to products in innovation, do not bring more value-added experience to consumers in services, and do not empower products and marketing in meeting the needs of consumption upgrading, the price rise is bound to come and go quickly. Because the price increase is only a digital change, there is no recharge of connotation and value, and there is no help of experience and satisfaction, the price increase will eventually become a gimmick.

Under the influence of overcapacity, intensified competition and various uncontrollable and uncertain factors, it may make the marketing of enterprises more difficult. Under the pressure of cost, the price of products may rise in a swarm, but without the support of real value and innovation, it may eventually disappear.

Perhaps the vast majority of enterprises believe that the price of Ceramic and Sanitary ware products should rise, but they lack convincing motivation. Taking advantage of the surprise brought by this accident, Ceramic and Sanitary ware enterprises should strive to make the price rise real. No matter in terms of quality, service, brand and innovation, or in meeting the needs of a better life, in the construction of the domestic circulation with the tide of domestic goods, they should give more internal value and value-added services to innovative products. Only when consumers really feel that the value for money, the price rise will be recognized and accepted. If the price rises only because of the rising cost, and the product stands still, consumers can only vote with their feet.

To stabilize the price rise of products, we need more real efforts and hard power behind and under the stage. To crack the cost rise, enterprises need to be based on the current and seek long-term innovation and transformation. In this way, we will win.