China Cement Network News, affected by insufficient demand, this year, Henan cement prices as a whole downturn, although experienced several rounds of increases, but soon fell back to the original level. After entering May, the price of cement in Henan has been declining all the way. According to the latest feedback, the price of some cement in Xinxiang, Nanyang, Sanmenxia and other places has been as low as 190 yuan/ton , and the enterprises have suffered serious losses.
Henan cement market also had a highlight moment. In 2019, Henan cement market staged a wave of rising prices, when a cement enterprise raised 190 yuan/ton in 15 days, Zhengzhou P.O42.5 cement prices once reached more than 600 yuan/ton.
However, only one year later, in 2021, Henan cement prices gradually opened the downward channel, and now cement prices have fallen to 190 yuan/ton, down more than 400 yuan/ton from the peak. Of course, the reason for such a huge decline is related to the "unconventional" rising market in 2019, but "three feet of ice is not a day's cold", Henan market has come to this day or inevitably.
Supply Side: Extreme Overcapacity Enterprises Fight
for Each Other 1. Serious Overproduction, Overcapacity More than a Little Bit
"How Much Overcapacity Does Henan Cement Have?"? In this way, Zhonglian Tongli, which ranks first, and Tianrui Cement , which ranks second , do not produce throughout the year, and the remaining enterprises can also meet the needs of the whole province, according to the statistics of China Cement Network. The total production capacity of Zhonglian Tongli and Tianrui Cement accounts for 55.18% of Henan Province.
Local enterprises and industry insiders also generally said that the excess rate of cement production capacity in Henan exceeded 50%.
Henan cement overcapacity is so serious, an important factor is that in recent years, local enterprises have increased production and transformation efforts, resulting in serious overproduction, the actual capacity is far greater than design capacity. "Some 5000t/d production lines can reach about 8000t/d after technical transformation," said a local enterprise.
2. The market structure is quite chaotic due to the "warlord separatist regime". The market structure of
Henan cement is not generally chaotic. Although the nominal "big brother" and "second brother" have more than 50% of the production capacity, the "third brother", "fourth brother" and "fifth brother" behind them.. Each is not a fuel-efficient lamp, not only competitive, but also difficult to work together. Most of the production lines of the second echelon enterprises
in Henan are large lines with a capacity of more than 5,000 t/d, which have been built in a short time and have advanced production and technical indicators. Taking a local cement enterprise as an example, the clinker production capacity is 4.805 million tons, including two 5500t/d production lines (put into operation in 2017) and one 4500t/d production line (put into operation in 2011), relying on the advantages of mines, technology, resources and other aspects, with low cost and good quality. It is not only highly competitive in Zhengzhou and other core markets, but also can still occupy the market initiative when sold to Shandong market. & nbsp; & nbsp;
In order to ensure that sufficient cement is supplied to the market under the increasing number of off-peak days of clinker production, they try their best to increase the overproduction capacity and expand the clinker storage capacity to ensure that their cement production capacity is maintained under the off-peak period. The little abacus crackled! & nbsp; & nbsp;
The leading enterprises lack the right to speak in the market, while the "second echelon" enterprises have great strength and dominate one side. When the market is good, everyone can live in peace, but once the market deteriorates, it is easy to break down the relationship of competition and cooperation because of their respective interests.
3, "Today's wine is drunk today", sitting back and watching the continuous expansion
of production capacity, like the whole country, Henan cement overcapacity has long existed. However, in the past few years, under the influence of supply-side structural reform, the industry has maintained a good profit trend.
Some people have formed an illusion that the industry can maintain a good development trend and relax the urgency of capacity removal by means of supply-side reform such as peak staggering production; Of course, most people may also know that the demand for cement will soon decline, and the problem of overcapacity must be solved, but with an attitude of "getting drunk today", they first make real money in their hands, and even in the context of off-peak production, they set off a wave of "production transformation" and a wave of expansion of clinker warehouses.
Over time, overcapacity has not been substantially promoted, but has been aggravated by serious overproduction.
Demand side: Over-reliance on real estate funds is a serious
problem. Henan cement market relies heavily on real estate support. Local enterprises say that about 50% of Henan cement market demand comes from the real estate market. In Zhengzhou and other places, the pulling effect of real estate accounts for 60% of the local cement demand. The downward trend of the real estate industry
in Henan has already shown very obvious signs in 2021. At that time, some real estate projects have appeared with the house to offset the situation, and last year to this year, the real estate industry situation is more severe.
In 2022, the investment in real estate development in Henan Province will be 679.336 billion yuan, a decrease of 13.7% over the previous year; of which, the residential investment will be 580.216 billion yuan, a decrease of 13.4%; The new housing construction area was 89.4868 million square meters, down 34.5%, of which 73.6747 million square meters were residential construction area, down 34.8%.
Meanwhile, in 2022, the sales area of commercial housing in Henan will be 11141 million square meters, down 16.1% from the previous year, of which the sales area of residential housing will be down 15.9%; the sales volume of commercial housing will be 672.482 billion yuan, down 22.3%, of which the sales volume of residential housing will be down 22.0%. If the
house is not sold well, the funds can not be returned, which further limits the demand.
Henan is a province with a large population, and the peak period of real estate development has brought a large demand for cement, but with the decline of real estate heat, its "counter-attack" on the cement industry is also quite fierce. In the
final analysis, the distorted supply-demand relationship is the core of the current predicament, coupled with the lack of mutual trust among enterprises, the lack of confidence in the future, and the worries about gains and losses in the face of the downward cycle, which makes the Henan market can only bottom out step by step.
Henan today may also be the future of many domestic markets, the intensification of the contradiction between supply and demand will magnify more and more contradictions, market imbalance, psychological imbalance, competitiveness imbalance.. All imbalances will eventually turn into snowflakes that crush the market.
In the future, there may be more "second" and "third" Henan.
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