[Cement Market Overview] March: Demand Accelerates Recovery, Price Trend Is Strong!

1. Overview

of national and regional market (1) National market: demand recovery accelerated, price trend was strong

. After entering March, the northern region was affected by low temperature and polluted weather, the pace of construction site was slow, demand recovery was not good, and the temperature in the southern region continued to rise. The shipments of cement enterprises are positive. Overall, the downstream demand continued to recover in March, the supply was enlarged after the end of peak staggering in many places, the supply and demand strengthened synchronously, and the cement price continued to rise. The national cement price index (CEMPI) was 137.80 points at the beginning of March, and closed at 141.40 points at the end of the month, with a month-on-month increase of 2.75%; due to the high absolute price in the same period, the cement price in this period decreased by 18.18% year-on-year.

Regionally, the supply-demand relationship in the six regions has improved, but the range is different. Specifically, affected by the rainy weather in the middle and last ten days in East China, the demand dropped slightly; the sales volume in the central and southern markets rebounded, and the market trend was strong; the market in the southwest region continued to recover, and the shipments of enterprises increased; the temperature in North China was low, and the overall demand was weak; the northeast region started slowly, and the market demand was weak; the northwest region opened kilns one after another, and the market pressure was prominent. Figure

1 and Figure 2: National Cement Price Index (CEMPI) and Cement Price Index (CEMPI) K-line

Chart in March 2023 Data Source: Cement Big Data (https://data.ccement.com/)

Cost. At the end of February, the average spot price of 5500 kcal steam coal was 1126 yuan/ton, down 9.19% annually and 15.02% year-on-year. In March, the domestic temperature was warmer, the daily consumption of power plants was lower, and the demand for coal entered the seasonal off-season; at the same time, the output of coal at the supply side increased steadily, combined with the growth of imports, the market supply was sufficient, and the price of thermal coal fluctuated lower. At the end of the month, the cost of coal per ton of cement was about 110.24 yuan, down 11.16 yuan from the end of February, and the cost pressure was reduced. At the end of March, the cost price difference between cement and coal was 256.67 yuan/ton, up 8.9% from the previous month, the price difference between cement and coal widened, the cost transfer ability of cement enterprises increased, and the production efficiency continued to improve.

Figure 3: Cement price, coal cost and price difference in March 2023 (yuan/ton)

Data source: cement big data (https://data.ccement.com/)