[Cement Market Overview] November: Market differentiation is obvious, the market is strong in the south and weak in the north!

1. Overview

of the national and regional market (1) National market: The market differentiation is obvious, the market is strong in the south and weak

in the north. In November, the issuance of special bonds was completed, and there was a certain amount of rush work in infrastructure projects, but there were still few new projects in the real estate sector, and the overall demand was weak; On the supply side, most parts of the north began to stagger the peak in winter, while many provinces in the south reduced production, and the supply pressure continued to ease. On the whole, the supply and demand of cement market were weak in November, but the production of cement was limited due to the off-peak shutdown of kilns and environmental protection supervision, the strong willingness of enterprises to raise prices, and the fluctuation of cement prices . At the beginning of November, the National Cement Price Index (CEMPI) was 109.69 points, and at the end of the month, it closed at 113.13 points, up 3.16% annually and down 25.74% year-on-year.

Regionally, the supply-demand relationship in the six regions has weakened, but the extent is different. Specifically, the demand in East China is weak and stable, and the shipment of enterprises is general; the supply in central and southern China is slightly tightened due to off-peak kiln shutdown; the rainy weather in southwest China is more, and the market sales are insufficient; the northwest China is gradually entering the off-season, and the market supply and demand are both weak; the temperature in northeast China is falling, and the demand is basically over; the demand in North China is flat, and the accumulation of enterprises is obvious.

Figures 1 and 2: November 2023 National Cement Price Index CEMPI, Cement Price Index (CEMPI) K-line

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

Cost. At the end of November, the average spot price of 5500 kcal steam coal was 938 yuan/ton, down 4.29% annually and 29.47% year-on-year. In the first ten days of November, affected by cold air and winter storage demand, coal prices stopped falling and rebounded, but suppressed by weak non-electricity demand and high port inventory, coal prices fell in the middle and last ten days. Overall, coal prices rose first, then declined, and finally closed down. At the end of the month, the cost of coal per ton of cement was about 91.83 yuan/ton, down 4.11 yuan/ton from the end of October, and the cost pressure was reduced. At the end of November, the cost price difference between cement and coal was 201.71 yuan/ton, up 6.96% from the previous month, and the price difference between cement and coal widened. In terms of

benefits, the average price of power coal in November was 947.36 yuan/ton, down 68.9 yuan/ton annually, and the average production cost of cement per ton was reduced by about 7 yuan/ton, while the average price of cement in November was 336.75 yuan/ton, up 11.23 yuan/ton annually, the price of cement rose and the production cost was less. It is expected that the profits of the cement industry will improve to a certain extent in November.

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

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