In 2022, the new national standards of "Sand for Construction" and "Pebble and Gravel for Construction" will be implemented, and the mineral resources planning of various provinces and cities will be issued one after another. How will the situation of the national sand and gravel industry develop in 2023?
First, the prices along the Yangtze River and the coastal areas are mainly falling, and the demand for the whole year of 2022 has dropped significantly
. Photo source: Cement Big Data (https://data.ccement.com/)
By the end of December, the national gravel price index was 88.07 points. The national machine-made sand price index closed at 94.38 points, down 7. From the average price of machine-made sand, the overall price of sand and gravel in 2022 showed a weak downward trend, the price weakened significantly after the middle and late of the second quarter , and the monthly average machine-made sand price index from April to October continued to expand. After the fourth quarter, the price rebound was not strong. The performance of key markets
in the north is general . Since October, the demand in some regions has ended, and the prices in key cities have weakened during the year. The prices along the Yangtze River and coastal areas have mainly fallen, and the decline in the Yangtze River Basin is obvious. Following the poor demand in the first half of the year, the peak season in the second half of the year has not yet arrived, and the price of sand and gravel in the Pearl River Delta has weakened during the year. It is not until October that the demand for sand and gravel has rebounded significantly. In the second half of the year, the price of sand in Jiangsu, Zhejiang, Shanghai and Anhui is generally lower than that in the same period in previous years. Hubei, Anhui, Chongqing in the Yangtze River Basin and Guangxi along the coast fell significantly, with Chongqing falling by nearly 30%. The
reason is that poor demand and excessive new capacity are the key.
Source: Cement Big Data (https://data.ccement.2022 ) The aggregate used in concrete, cement products and similar products in China decreased by about 10% year-on-year. According to the report on the construction sand and gravel market in Shanghai in 2022 issued by the Shanghai Sand and Gravel Association, the consumption of construction sand and gravel in Shanghai in 2022 decreased by more than 20% compared with the same period last year.
Production capacity has been released in piles, and central and southern China and East China have been greatly impacted. According to statistics, from January to December, at least 73 aggregate production lines were put into operation in China, with an annual production capacity of more than 4. Among them, there are at least 15 production lines with an annual production capacity of more than 10 million tons, of which 8 are located in the central and southern regions, and the new production capacity of central and southern China, East China and Southwest China accounts for more than 90%. Hubei, Chongqing and Henan are the three provinces and cities with the largest new production capacity, with Hubei alone adding more than 100 million tons of new production capacity.
Photo: Cement Big Data (https://data.ccement.) However, from 2017 to 2022, the annual production capacity of sand and gravel aggregates in the Yangtze River Basin provinces and cities (including Zhejiang), excluding Qinghai Xizang, tripled. The Yangtze River Basin is facing a crisis of excess supply, and long-term prices may enter the downward range.
2. The average resource reserves of a single mining right have increased, and Guangdong has become the province
with the largest total transfer reserves. Photo source: Cement Big Data (https://data.ccement. ) According to the results of the mining right transactions that have been published so far, In 2022, there were a total of 774 transactions of sand and gravel mining rights, representing a year-on-year decrease of 12%, and a total of 243 resource reserves were transferred. The central and southern regions are the regions with the highest resource reserves of transferred mining rights, accounting for more than 60% of the national resource reserves, representing a year-on-year increase of more than 150%.
Photo Source: Cement Big Data (https://data.ccement.2022 ) The average resource reserve of a single mining right sold in the central and southern region in was nearly 100 million tons, an increase of more than 60% over the same period last year. In addition, at least 185 large-scale mining rights (with a turnover of more than 50 million yuan or resource reserves of more than 50 million tons) were traded in 2022, an increase of 18% compared with 2021. In 2022, the number of large-scale mining rights transactions in central and southern China almost doubled compared with 2021, offsetting the impact of the reduction in the number of large mines in East and Southwest China.
Source: Cement Big Data (https://data.ccement. ) The average transaction price of sand and gravel mining rights in China is about 4 yuan/ton, down about 20% year-on-year, of which the decline in the unit price of mining rights transactions in East China is the most obvious. The unit price gap of sand and gravel mines sold by each province has been narrowed. Zhejiang and Liaoning are the provinces with the highest and lowest unit price of mining rights. Specifically, the transaction unit price of Zhejiang dropped from more than 30 yuan/ton in the first half of the year to less than 20 yuan/ton, which further lowered the overall transaction unit price of mining rights in East China.
Source: Cement Big Data (https://data.ccement.) Specifically, Hubei's resource reserves have grown rapidly, and the focus of mining rights transfer along the Yangtze River has shifted to the middle reaches of the Yangtze River.
Photo Source: Cement Big Data (https://data.ccement.2022 ) The scale of mining rights transactions in coastal areas was relatively large, and Guangdong was the province with the largest transfer of resource reserves, with a year-on-year increase of more than 300%, reaching more than 5 billion tons. Specifically, in 2022, China Electric Power Construction made frequent moves in Guangdong, and the resource reserves of its mining rights reached 50% of the resource reserves transferred by Guangdong. Outlook
of the
sand and gravel industry Photo source: Cement Big Data (https://data.ccement. Meanwhile, mineral resources planning of various provinces and cities has been introduced, which will continue to increase the proportion of large and medium-sized mines.
Photo Source: Cement Big Data (https://data.ccement. ) According to statistics, there will be more than 300 sand and gravel aggregate projects in China in 2022, with a total capacity of more than 1.2 billion tons. The new proposed projects in 2022 are mainly distributed in central and southern China and East China, with about 50% of the production capacity in central and southern China. Among them, Anhui and Hubei along the Yangtze River and Guangdong along the coast are far ahead of the planned production capacity.
According to the transfer of sand and gravel mining rights in 2022, the transfer of resource reserves and the production scale of mining rights in the central and southern regions are absolutely the same. It is expected that the central and southern regions will remain the most active area for sand and gravel aggregate projects in 2023, and the production capacity to be released in Guangdong, Hubei and other places will continue to accelerate growth.
Combined with the above situation, Zhu Xiaoyun put forward three suggestions:
1. The problem of overcapacity is becoming more and more serious. For the popular areas along the Yangtze River and coastal areas, enterprises should be more cautious in taking mines.
2. Prices have entered the downward range, and the era of high gross profit may be over , so more attention should be paid to cost-side control.
3. Although the demand for sand and gravel at the infrastructure end still maintains a strong momentum, many infrastructure projects use their own sand and gravel, which is difficult to boost the market. Sand and gravel production enterprises should calmly look at the recovery of sand and gravel demand.
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