In the first half of 2021, China's construction machinery market at home and abroad operated steadily. The export of complete construction machinery and parts has achieved rapid growth, the export of key models has achieved substantial growth, and the export continues to be high-profile.
In the first half of 2021, China's construction machinery market at home and abroad operated steadily. The domestic market continues the growth trend in 2020, and the industry scale continues to expand. Due to the advance of the sales peak season, the sales volume of most models increased significantly in the first quarter, reaching a new high. In the second quarter, affected by the rise of raw material prices and the decrease of operating rate, although there was a decline in sales growth and negative growth, it maintained an overall growth in the first half of the year. In terms of foreign markets, with the gradual recovery of overseas economic activities, the demand for infrastructure construction in various countries is increasing. Relying on the supply advantages of China's whole industrial chain, the export of key markets and regional key products has increased significantly. At the stage when most international countries are still affected by the epidemic, they have preempted to occupy the market share.
Under the new development pattern of taking the domestic big cycle as the main body and the mutual promotion of domestic and international double cycles, China's construction machinery manufacturers have made rapid progress in the global position and ranking. On the list of top 50 global construction machinery manufacturers in 2021 released by the UK KHL group, the world's most authoritative construction machinery information provider, XCMG ranked third for the first time in history; Sany Heavy Industry and Zoomlion ranked fourth and fifth; Other domestic enterprises entering the top 50 include Liugong (15), Longgong (23), Sunward (31), Shantui (32), Foton Lovol (38), Dingli (46) and Xiagong (50). In 2020, China's construction machinery sales grew against the trend, and its share of total global sales surged from 17.7% in the previous year to 24.9%, surpassing the United States for the first time and becoming the country with the largest market share of global construction machinery. In 2003, it was only 1.6%. Sany Heavy Industry, the sales volume of mining machinery reached 98705 units in 2020, ranked first in the domestic market for ten consecutive years, and won the global sales champion for the first time, accounting for 15% of the market share.
In the first half of the year, China's export of complete construction machinery and parts achieved rapid growth
According to the statistics of Global trade watch, in the first half of the year, the total import and export volume of China's construction machinery products (89 kinds of HS codes, including 76 kinds of host products and 13 kinds of parts) was US $17.122 billion, a year-on-year increase of 47.94% and 20.42% over the same period in 2019. Among them, the export volume was US $15.076 billion, a year-on-year increase of 55.14%, an increase of 25.98% over the same period in 2019; The import volume was USD 2.046 billion, with a year-on-year increase of 10.24% and a decrease of 9.11% over the same period in 2019; The trade surplus was US $13.03 billion.
In terms of export, the export of complete machines was 11.9187 million units, a year-on-year increase of 35.35%, and the export volume was US $9.688 billion, a year-on-year increase of 63.49%, an increase of 29.9% over the same period in 2019 (US $7.458 billion); The export of spare parts was USD 5.388 billion, a year-on-year increase of 42.09%, an increase of 19.47% over the same period in 2019 (USD 4.509 billion).
Since 2021, one belt, one road, along with the expansion of the scope of overseas vaccination, has increased the investment in infrastructure construction in North America and the "along the way". Factors such as newly signed overseas contracting projects in the fields of transportation and power engineering have driven the upsurge of demand, coupled with the stable guarantee of the production and manufacturing capacity of China's construction machinery industry. In the first half of the year, the export of China's construction machinery products and related parts achieved rapid growth.
In 2020, affected by the epidemic situation at home and abroad, the export of construction machinery in China did not become positive until October. From 2021, the export has fully recovered. As of June, the export volume and export volume have achieved double growth for six consecutive months, and exceeded the level in the same period in 2019.
Asia Europe market is still the main export region
Asia is still the largest market for China's construction machinery exports, with an export volume of US $6.898 billion, accounting for 45.76% of the total global construction machinery exports in the first half of the year. Japan remains the largest export destination in Asia. The rapid recovery of the markets of ASEAN member countries such as the Philippines, Vietnam, Indonesia and Thailand has greatly promoted the export of ASEAN and even Asia. Exports to the 10 ASEAN countries reached US $3.163 billion in the first half of the year, accounting for 45.85% of the total exports to Asian countries, with a year-on-year increase of 78.11% and 41.5% over 2019.
Europe is China's second largest export market. In the first half of the year, China's export of construction machinery to Europe was US $3.324 billion, accounting for 22.05%, with a year-on-year increase of 55.73% and 29.42% over the same period in 2019. The proportion of exports to Europe increased by 0.09% compared with 2020. The continuous improvement of the proportion of exports to Europe shows that China's construction machinery manufacturing level is gradually recognized by the mainstream market and developed countries.
In the North American market, China's construction machinery is only exported to the United States and Canada, of which the United States market accounts for 86.56% and Canada accounts for 13.44%. In the first half of the year, the export to North America was US $1.718 billion, accounting for 11.39% of China's total export of construction machinery, with a year-on-year increase of 36.56%, an increase of 9.31% over the same period in 2019 and a decrease of 1.55% over 2020. Despite the impact of multiple factors such as tariffs, origin and tight international logistics, the rising demand in the North American market still drives the growth of exports.
Exports to Africa reached US $1.338 billion, accounting for 8.88%, ranking fourth, with a year-on-year increase of 49.94% and 23.76% over the same period in 2019; Exports to Latin America reached US $1.114 billion, accounting for 7.39%, ranking fifth. The export volume increased by 81.8% year-on-year and 63.04% over the same period in 2019. The significant increase in exports to the Latin American market confirms the continuous enhancement of our enterprises' ability to explore the international market.
In the first half of the year, exports to Oceania reached 684 million US dollars, accounting for 4.54%, ranking sixth. The export volume increased by 47.88% year-on-year and 20.18% over the same period in 2019.
In the first half one half of 2021, one belt, one road, 59 countries signed 1920 contracts for foreign contracted projects, and the new contract amount was 301 billion 370 million yuan, down 8.6% from the same period last year (46 billion 490 million US dollars, down 1%), accounting for 56.2% of the total contracted amount of foreign contracted projects in the same period. The completed turnover was RMB 1996.6 billion, a year-on-year decrease of 2.8% (equivalent to US $30.8 billion, a year-on-year increase of 5.2%), accounting for 58.2% of the total in the same period. As one belt, one road, one belt, one road, the trade cooperation continued to deepen, the trade area expanded and the trade scale increased significantly. The export volume of construction machinery to the countries along the "one belt" road reached US $6 billion 675 million, accounting for 44.28% of the total global exports, and the export volume grew by 60.49% year-on-year, up 29.22% from the same period in 2019, and exports reached a record high.
The export of key models increased significantly
In the first half of this year, the export of major construction machinery products and related parts such as excavators, loaders, crawler cranes, all surface cranes with a maximum lifting capacity of > 100 tons, concrete pump trucks, rollers, graders, pavers, internal combustion forklifts, electric forklifts and lifting platforms showed a significant upward trend. Among them, the wind vane product crawler excavator has achieved an excellent performance of export growth of more than 100%.
Tower cranes, concrete mixers, concrete pumps, self-propelled tunnel boring machines, some cranes, pile drivers, etc. have decreased in varying degrees due to different construction environment and customer needs.
Current problems and suggestions in the industry
The common problems faced by all foreign trade enterprises are the shortage of shipping price and space booking, the rise of bulk raw material prices and exchange rate fluctuations.
1. Risk of foreign exchange settlement
Although enterprises in our industry are making greater efforts to use RMB for settlement, USD settlement or local currency settlement is still the main way for customers. Over the past year, the exchange rate fluctuation of RMB against the US dollar has made it more difficult for export enterprises to quote, the profit margin is unstable, and there are still a series of follow-up problems, such as not daring to settle foreign exchange after payment collection, unable to receive orders and so on. It is suggested that enterprises give priority to using RMB for settlement. For example, if using foreign currency for settlement, they can avoid certain exchange rate risk by means of exchange rate locking, or they can complete foreign exchange settlement by looking for foreign banks with local currency settlement capacity.
2. Rising prices of raw materials
Since the fourth quarter of last year, with the gradual recovery of the demand side and the continuous improvement of environmental protection requirements, the prices of raw materials at home and abroad have risen sharply, and there is a shortage of imported core parts. For a period of time, enterprises are unable to predict the price trend of raw materials, which has caused great pressure on their production, operation and order receiving. At the same time, the output of upstream parts manufacturers is reduced, and the operation rate of downstream user engineering construction is reduced, which also forms a great obstacle to the industry's foreign trade export. It is suggested that enterprises arrange orders in a planned way, scientifically arrange inventory, reasonably increase prices and maintain a safe profit margin.
3. Soaring sea freight prices
Due to the impact of the epidemic, the whole logistics industry chain, such as land transportation, air transportation, shipping and railway transportation, has been affected to varying degrees, especially in maritime transportation. Since July last year, the freight of domestic routes to major overseas markets has soared to varying degrees, especially the container freight rate, and some routes have increased more than ten times. Despite the soaring freight rates, enterprises are still hard to find a box and a warehouse. The occurrence of black swan events such as the Suez Canal and the congestion of major ports around the world exacerbate the problem, and the available effective transport capacity continues to decrease, resulting in a serious imbalance between supply and demand.
In the future, enterprises will still face the problem of high freight rates. In view of the current shipping problems, it is recommended that enterprises reasonably formulate logistics costs in operation, negotiate with customers to solve the problem of shipping freight, adopt a more stable trade method to solve the problem of shipping and cargo connection, solve the problem of large backlog of inventory goods, improve export flexibility and mobility, and avoid greater losses caused by user abandonment due to difficult delivery and high freight. At the same time, it is also suggested that enterprises choose to directly sign contracts or long-term service contracts with shipping companies to reduce intermediary links and control logistics costs to the maximum.
Industry development forecast in the second half of the year
According to the current global epidemic development, international situation and several major problems faced by enterprises, it is expected that China's construction machinery export will show a "high before low" trend in 2021, with a year-on-year increase of about 25%, and the growth trend will gradually slow down and narrow in the second half of the year, with an overall increase of 10-13% compared with that expected in 2019.
Thanks to the excellent epidemic control in China, the resumption of work and production and foreign trade export are in the leading position in the world, and have gained more market share. At the same time, we need to pay more attention to the improvement of product quality and overseas post market service level, so as to enhance the competitiveness of enterprises, improve user satisfaction, especially the loyalty of new users, maintain market share and enhance brand value. Some small products can appropriately increase online e-commerce channels according to the market to assist users in completing operations. In addition, with regard to shipping, enterprises will still face the problem of high freight rates in the future.
