In the first half of the year, the year-on-year growth rate of automobile production dropped by 46 percentage points, but the overall operation of the steel industry was stable, and the building materials and other industries grew significantly. Despite the inflection point of the national control policy, the construction of affordable housing this year has become the highlight of my country’s macro-control. 10 million sets of social housing are “escorting” the regulation and control. This brings new opportunities to our abrasives industry, but at the same time Be alert to the threat of overcapacity. The cost of raw materials, electricity, manpower, etc. are all rising, but our corundum price has not risen. The main reason is the overcapacity. Some companies are affected by the flow and only use sales to realize their business operations. Fair competition disrupts the order of the entire corundum market.

At present, the market competition of corundum enterprises mainly comes from the transfer of power plants and aluminum plants. These companies rely on the advantages of electricity and bauxite resources to smelt corundum. What is more important is that these companies do not respect market rules and sell wantonly, which has caused serious harm to the normal development of the corundum industry.

Since March, the off-season "power shortage" has occurred in many parts of the country. A series of policies such as the National Energy Administration and successive industries, especially high-energy-consuming industries, increase the price of industrial electricity, and other policies have created a greater impact on the silicon carbide industry, which is already in a downturn.

In 2011, with the tightening of national macro-control, the central bank raised interest rates three times and raised the deposit reserve ratio five times, and the survival and development of small and medium-sized enterprises were facing difficulties. The survival prospects of the weak enterprises in the silicon carbide industry are worrying. The pressure for the appreciation of the renminbi has increased sharply, and silicon carbide products are national export products. It should be noted that this may cause more companies to dominate domestic sales and further intensify competition in the domestic market.

Generally speaking, the situation of abrasives companies in the first half of the year is still good. Small companies are suppressing production, reducing production, and stopping production. Large companies have continuous orders, which can be said to be in short supply. The important point for these large abrasive companies to achieve good performance in such a situation is to adjust the industrial structure, abandon low-value-added products, and increase product R&D productivity. The development momentum of the company is good. Abrasives have higher requirements for the quality of abrasives, and the deep processing of abrasives is particularly important.