May Grader: Strong export situation along with downturn of domestic market

Domestic market is weak, while the export market grows steadily.

According to the statistics of China Construction Machinery Business Online, the grader sales volume of the 13 major grader manufacturers from January to May 2012 totals 1980 units, reducing 15.82% compared with the same period last year, among which, the sales volume in the domestic market is 929 units, accounting for 46.92% of the total sales volume, with a year-on-year reduction of 40.26%; the export volume is 1051 units, accounting for 53.08% of the total sales volume, with a year-on-year increase of 31.87%. Compared with the downturn of the domestic market, the export market remains steady growth. In May, the grader sales volume in China is 459 units, growing 6.50% compared with last month and 3.61% compared with the same period of last year.

XCMG Road Construction Machinery retains top position in terms of sales volume.

From January to May, in terms of accumulative sales volume, XCMG Road Construction Machinery ranks the first by 674 units, with a market share of 34.04% although the sales volume reducing 25.19% year-on-year; Changlin is on the 2nd place by 372 units; Dingsheng Heavy Industry ranks the 3rd with 236 units.

Products of 180-199HP remains the most popular, product demand continues to transfer to the middle and low horsepower.

Compared with January to May of 2011, the demand for products of 120-159HP increases greatly; while the demands for others reduce in varying degrees, with the largest drop for products of 180-199HP by 21.51%. The main products remain products of 180-199HP, with the market share of 40.56% in 2012.

Export market is strong.

From January to May, in terms of export, XGMA, Shantui, Changlin and XCMG Road Construction Machinery grow greatly, while LiuGong and Sinomach drop. The export products are mainly concentrated on 160-299HP.

Macroscopic interpretation

1. In the government conference held on March 5th, Premier Wen Jiabao said that China aims to grow its economy by 7.5% in 2012, which is the first time that the GDP growth is cut from 8% to 7.5% for 8 years.

2. Real estate: As to the real estate control policy, the official has confirmed not to launch new policy, but the current policy will not be loosened. Besides, the scale of indemnificatory housing construction hits a new high.

3. Railway: In the first half year of 2012, the investment to railway reduces compared with the same period last year; while in the second half year, the investment to railway will rebound due to the large-scale relaxation of the currency policy.

4. Highway construction: Though the currency policy in 2012 is positive, the highway construction still faces the capital shortage. During the twelfth five-year, the investment to highway construction decreases compared with 2010 and 2011.

5. Mining industry: Under the background of increasing resource price and stably growing demand, China’s mining industry shows stable growth trends. In 2012, because the global economy slows, the resource price is expected to fall slightly, while the investment to mining industry in China is expected to grow stably.

6. Water conservancy construction: Since 2011, the central and local governments have successively launched a series of files for the water conservancy construction. In 2011, the investment to the water conservancy construction totals CNY345.2 billion, with CNY114.1 billion from the central government and CNY231.1 billion from local governments. The investments from both central government and local governments hit a new high in the history.