Cement price generally declines cement plant: has dropped by more than 100 yuan / ton

category:Finance
 Cement price generally declines cement plant: has dropped by more than 100 yuan / ton


Whats the logic behind this? With doubts, the reporter interviewed many cement manufacturers, distributors and experts in the industry to try to find out.

Survey: overall decline of cement price

When asked about the recent price of cement, an Anhui cement dealer told reporters: it has been reduced for a while, probably by 20 yuan per ton at the end of April and the beginning of May. This dealer not only sells conch cement, but also Dongguan cement and other local brands. She told reporters that the cement prices of these brands have declined to varying degrees.

Shortly after the start of construction in April, the price was reduced by 20 yuan. Recently, there is no price reduction. Guangdong a cement factory laments: big factory reduces price, small factory also drops along with it.

In the third and fourth quarters of last year, a wave of price hikes took place in the northern cement producing areas represented by Henan Province, which was tracked and reported by reporters of the daily economic news. At that time, the price of po42.5 bagged cement (most commonly used) in Zhengzhou, Henan Province was as high as 720-730 yuan / ton, while that of Anyang, Henan Province was as high as 650-660 yuan / ton.

A cement plant in Henan Province has an annual output of 1.2 million tons. Referring to the recent cement price, the general manager of the enterprise told the daily economic news that the price has been reduced since the Spring Festival, basically not increased. The po32.5 specification has been reduced from 440 yuan / ton last year to 310 yuan / ton, and the po42.5 specification has been reduced from 500 yuan / ton to 360 yuan / ton.

The reporter inquired the cement prices of the representative provinces in North China, central China, East China and South China, and found that according to the price trend of nearly half a year, the North basically continued to decline, while the South fluctuated slightly in the overall decline.

Wang Qi, an analyst of Zhuo Chuang information cement industry, told the daily economic news that cement prices in the south of the Yangtze River Basin fluctuated in the downward trend this year, while in the north, they only declined. The northwest region has been rising for some time because of the better expectation of infrastructure construction, but now the busy farming has also fallen.

South: rainy and unfavorable construction in June

Wang Qi explained to reporters: the cement market is basically fragmented, with different situations in different regions. Similar economic environment and climate conditions will form similar price trends. At present, the scope of this price reduction is mainly the Yangtze River Basin and the south of the Yangtze River Basin, and the time points of price reduction vary from place to place.

Talking about the trend of cement price in southern China, Wang Qi said that the price fell in the first quarter, mainly from the end of April to May. At the end of May, there began to be signs of price reduction, and in June, the price began to fall.

Wang Qi said that prices in the southern market have been rising from April to May. Since April, the resumption of construction and production has been gradually pushed forward, and the project has been in a hurry. In addition, the construction volume of this years infrastructure construction is relatively large, and the demand for construction has been promoted obviously. As for the reason of price reduction, it is the high temperature and rainy in June, which is not conducive to construction.

A senior professional in Shandong also told the daily economic news that the demand in the South recovered early, especially in Jiangsu, Guangdong, Hainan and other places. In addition to the sufficient labor force, the construction period is very fast in the non Meiyu season, and the demand is large, which often requires a large amount of cement from the northeast and foreign countries.

However, in the south, the cement price will be lowered every rainy season, so the price reduction is obvious. The person said.

In addition, a person familiar with the matter disclosed to the reporter that the annual sales task of conch cement is required to be more than half of the time, and 50% of the annual sales task should be completed before the end of June, so some concessions may be made in price.

The reporter inquired about Conch Cements official website and found that the company has repeatedly mentioned to ensure the completion of the target task of double half in half a year and winning victory in the whole year.

The reporter also noted that about the current round of price decline, there is a saying in the industry that it is because of the entry of foreign low-cost cement. For this point of view, the above-mentioned experts believe that at present, the epidemic is spreading all over the world, there are few foreign ships coming, and the price reduction in the south is large, and the profit space of foreign cement is small, so the operation willingness of middlemen is small.

North: high inventory and insufficient demand

Although the cement price in the northern region generally only falls but does not rise, the recent decline is relatively small, because the price did not rise in the early stage.

The general manager of a cement plant in Henan said frankly that the problem of excess capacity in the cement industry is prominent, and the balance of supply and demand is very difficult when the demand is good. In order to increase the price, there must be demand, and more importantly, production restriction.

The local cement companies wanted to raise the price, but they failed several times. The general manager said that now it can sell about 2000 tons per day on average, and the total sales volume is less than last year.

The cement price in Shandong also basically continued the downward trend year after year. The above-mentioned insiders introduced to the reporter of daily economic news that in January and February this year, due to the epidemic factors and the off-season itself, the enterprises were not in a hurry and the price reduction was very small.

In March, the market started according to the usual practice of previous years, but a large number of construction workers were not in place, so many enterprises began to reduce their prices, which had been falling in March and April. May is also falling, but because demand has reached the original level, the decline is very small. He said that in June, it should have picked up according to the previous practice, but it did not pick up. Now it catches up with the wheat harvest, the progress of the project slows down, and the demand is not good.

He further elaborated that from the perspective of supply, on the one hand, many enterprises had a high inventory before the year, which was intended to make reserves for the project construction after the year, but this years market only recovered to 70% of the previous years by the end of April, which was postponed for more than one month. On March 15, when the off peak production was finished and the kiln was opened, the inventory increased again.

It is worth noting that the person mentioned the conch cement subsidiary in Shandong. Conch adjusts the price according to its own inventory. If the inventory is high, the price will be reduced, and if the inventory is low, the price will be increased. In the middle of April, conch cement dropped by 30 yuan / ton, bringing down the whole market price. In the first ten days of May, conch cement began to recover again, because the inventory has declined.

On the other hand, the entry of some low-cost products from other provinces also has an impact on the local market, especially the surrounding Henan and Hebei provinces, which have higher inventories and lower prices. In addition, before May 6, the expressway has been free of tolls, with low transportation costs and a large number of cement entering Shandong.

In this persons view, in fact, the price reduction in the northern regions after the year is mainly due to insufficient demand. He analyzed that there are quite a lot of large projects this year, but these large projects have their own time nodes, which need to be approved, planned and bidding before construction. At present, most of the projects have just started some preliminary basic work, and the time limit for a large number of construction is not yet reached. Moreover, many large projects span two to three years, and the amount of cement needed is 230000 tons, which is very small in one year.

Referring to the current po42.5 cement price, he said that it is not the same everywhere, with the high of 430-440 yuan / ton and the low of about 400 yuan or even lower. Generally, the East is high, the west is low, the developed cities are high, and the backward cities are low. It is related to the local economic environment and the level of economic development.

Later stage: will continue big stability and small movement

This years report on the work of the government clearly proposes to expand effective investment. This year, it is planned to arrange 3.75 trillion yuan of local government special bonds, an increase of 1.6 trillion yuan over last year, increase the proportion of special bonds that can be used as project capital, and arrange 600 billion yuan of investment within the central budget. We will focus on supporting the construction of two new and one heavy projects, namely, the construction of new infrastructure, the construction of new urbanization, and the construction of major projects such as transportation and water conservancy, which will promote consumption and benefit the peoples livelihood while adjusting the structure and increase the potential.

Prior to that, on April 30, CSRC and national development and Reform Commission jointly issued the notice on promoting the pilot work of REITs in the field of infrastructure, which will fully rely on the capital market and actively support high-quality infrastructure projects in key regions and key industries in line with national policy orientation to carry out REITs pilot.

Insiders believe that REITs can greatly expand the source of capital, effectively activate the stock assets, form a virtuous investment cycle, increase the proportion of direct financing, and reduce the leverage ratio of enterprises.

With the support of many policies, infrastructure investment continues to increase, and large-scale infrastructure construction ushers in a new cycle. In such a background, what is the trend of cement market?

Wang Qi believes that as far as the southern region is concerned, the market has begun to enter the off-season, and the price is likely to decline for two consecutive months or so. Generally, it starts to fall after July, with less rainfall and rising prices. Especially after the national day, the two markets like the Yangtze River Delta and the Pearl River Delta belong to the input market. It is easy for the local market to be in short supply, and the price is likely to rise.

In Wang Qis view, although the current price in the northern region is not the bottom, it is not very good to reduce the price for the time being.

As far as North China is concerned, first, due to the influence of transportation distance and transportation cost, the cement entering Hebei and Henan from Inner Mongolia and Shanxi has not been reduced; in addition, the current price of Hebei and Henan is not much higher than that of foreign cement, so the downward space is not very large. Unless local enterprises become more competitive in the later stage, they will start to bargain. Wang Qi said that the price in Northeast China is 240-300 yuan / ton, which is already relatively low, and it is unlikely to continue to reduce prices.

Wang Qi said frankly that the production cost in the past two years is relatively high, and it is unlikely to return to the level of more than 200 yuan / ton a few years ago. In order to increase the price, we must limit the production. Generally, the peak shifting production price in autumn and winter will be the same as that in previous years.

In the view of the general manager of a cement plant in Henan Province, in the long run, the cement price is not determined by human factors. Under normal production conditions, the production is larger than the sales, so the price will not rise. In autumn and winter, when peak shifting production occurs, the enterprise will stop production with limited production, reduce production capacity and supply shortage, and the price will rise. According to the above-mentioned people in Shandong Province, the cement price will continue the trend of big stability and small movement - overall stability, dynamic adjustment of individual regions and time periods. Taking Shandong as an example, it is now stable, and may be affected by some factors in July and August. The high temperature weather in July, together with the entrance examination and high rainfall in August, will slow down the construction progress and affect the demand for cement. He said that in previous years, the demand in the northern region was not good from July to September. Generally, the price in Shandong began to pick up in September, and the project will speed up from October to December. At this time, there will be a periodic shortage of supply, and the price will go higher. The cement industry is a fully competitive industry, and the price trend mainly follows the market demand, the person stressed Source: Daily Economic News Author: Zhang Rui editor in charge: Wang Xiaowu_ NF

In the view of the general manager of a cement plant in Henan Province, in the long run, the cement price is not determined by human factors. Under normal production conditions, the production is larger than the sales, so the price will not rise. In autumn and winter, when peak shifting production occurs, the enterprise will stop production with limited production, reduce production capacity and supply shortage, and the price will rise.

Taking Shandong as an example, it is now stable, and may be affected by some factors in July and August. The high temperature weather in July, together with the entrance examination and high rainfall in August, will slow down the construction progress and affect the demand for cement. He said that in previous years, the demand in the northern region was not good from July to September. Generally, the price in Shandong began to pick up in September, and the project will speed up from October to December. At this time, there will be a periodic shortage of supply, and the price will go higher. The cement industry is a fully competitive industry, and the price trend mainly follows the market demand, the person stressed