The overcapacity of the aluminum veneer industry has a very negative impact on development

　　A wave of de-capacity and production reduction that has almost swept the world has left the entire aluminum veneer industry shrouded in the haze of overcapacity. The continuous expansion of the aluminum veneer industry and severe overcapacity in the market have drastically cooled this blindly expanding company. It should be said that this is the inevitability of blind expansion of enterprises under the background of weak international and domestic demand.

　　Some people in the industry believe that the direct reason for the reduction in production is that the change in Indonesia’s bauxite export policy has increased the cost of my country’s import of bauxite. However, another main reason is that in the context of weak domestic demand, the country has not stopped its frantic expansion. It is reported that in the first half of 2007, due to the rapid increase in new projects in some industries, the Development and Reform Commission and other five departments have issued special notices requiring all regions to clean up new projects above 100 million yuan, and the aluminum veneer industry is even one of the key cleanup industries. In the first half of 2008, due to overcapacity, aluminum veneer companies reduced production one after another, but they still were unable to boost market prices. The direct impact of the rapid increase in domestic aluminum veneer output is the decrease in aluminum veneer imports and the increase in bauxite imports. When domestic resources are unable to support domestic demand, aluminum veneer manufacturers continue to expand production capacity but do not have sufficient supply of raw materials, which greatly increases import dependence, which directly leads to the increase in the price of imported bauxite and the price of aluminum veneer. Under the dual pressure of the decline, most factories were unable to bear it and were forced to cut production. In just a few years, the aluminum veneer industry has repeatedly faced industry-wide production reductions due to overcapacity and falling prices. Perhaps this is because the price law is playing a huge regulatory role, guiding the imbalanced commodity supply and demand status to rebalance. Overcapacity will inevitably have a very negative impact on the development of the industry. There are many reasons for the problem of overcapacity. The first is the imperfect investment and financing system, companies ignore market conditions, and blindly invest for profit, etc. Of course, there are also soft constraints such as long-term low prices of land, energy, and human resources. . Despite these force majeure constraints, before making a decision to expand production, companies can first accurately evaluate and predict the future supply and demand of commodities and their own competitiveness, which can greatly avoid their own losses. However, compared with overcapacity, sluggish demand has a greater impact on the profitability of the aluminum veneer industry. Production reduction can only slow down the excess of aluminum veneer, but cannot restore the decline in aluminum veneer prices. Therefore, if the hope of saving the market is only pinned on a reduction in production, it may fail. The repeated expansion and reduction of production in recent years are proof. But relative to production cuts, boosting market demand is a difficult subject.

　　The market is complex, and the influence of the global economy and the development of related industries all affect the aluminum veneer market. The driving force for boosting market demand comes more from macroeconomic policies and the degree of market economy. The development status of aluminum veneers and the strength of aluminum prices also affect the aluminum veneer market. Therefore, as a company, the way to avoid risks is to analyze the market situation objectively and scientifically, and cannot blindly follow, and make decisions that are in line with its own strength and market development. Only in this way can we occupy an active position in the rapidly changing market.