The crossroads of construction machinery giants

Affected by the global epidemic since April last year, raw materials have entered an upward cycle, and the construction machinery industry has been under pressure. At the same time, the domestic medium and long-term "carbon peak" and "carbon neutral" policies have promoted structural adjustments on the supply side, and supply and demand have shown a tight trend. Superimposed on the air outlet of green intelligence, the construction machinery industry once again stands at the crossroads of reform and innovation.

On June 8, the 21st Century Business Herald interviewed and learned that construction machinery leaders represented by Sany Heavy Industry, Zoomlion, Sunward Intelligent, and Xugong Machinery are seizing major sales and production opportunities in the domestic and international markets; at the same time , The rise of raw materials and new requirements for green production force companies to develop intelligent production equipment and processes. In terms of green production, the domestic construction machinery industry has broken in many areas. According to BCG forecasts, China's pure electric construction machinery market will reach a flashpoint in 2025-2026. By 2035, the penetration rate of pure electric construction machinery may reach 30%.

Li Zhe, an analyst at Essence Securities, pointed out that the current rise in raw materials is boosting the new round of price increases for construction machinery. Internationally, the global economy has recovered from recession to recovery after the new crown epidemic. Domestically, on the one hand, China’s economy will be in the second quarter of 2020. It began to gradually complete the resumption of work and production, and demand picked up; on the other hand, the "carbon neutral" policy was introduced to promote supply-side adjustments.

The upstream of the construction machinery industry is mainly the material industry that provides raw materials and parts, motor and parts manufacturing, such as steel for construction machinery, internal combustion engines, hydraulic systems, bearings, tires, etc. The raw materials account for more than 90% of the total cost of construction machinery enterprises. Wind data shows that the raw material costs of Sany Heavy Industry, Zoomlion, and Xugong Machinery accounted for 90.78%, 95.28%, and 84.94%, respectively.

Recently, the price of iron ore raw materials in the international market has soared, which has led to the continuous increase in steel prices. According to my steel network data, the average price of rebar (take HRB40020mm: national average price as a sample) has risen from less than 3,600 yuan/ton in early April 2020 to nearly 6,350 yuan/ton in early May this year, an increase of nearly 13 months. 80%.

Under the skyrocketing raw materials, the construction machinery leaders are obviously under pressure. At present, corresponding price adjustments have been made for products with a relatively large share of steel (such as construction cranes, mixing plants, etc.), which partly transmits cost pressures. On the other hand, the company negotiates with suppliers to jointly absorb part of the cost and jointly respond to market fluctuations.

The data shows that since June 1st, Zoomlion has raised the price of station machinery and construction crane products by 1,000 yuan/ton; XCMG also issued a price adjustment letter in mid-May, and its full range of tower cranes and construction elevators Increase prices in June.