According to the China Cement Network Market Data Center, the recent rainy weather in Jiangsu has slowed down the construction progress, and the overall market demand is weak; Market competition intensified, cement prices continued to decline, and cement prices were lowered by 10-20 yuan/ton in many places from 8 to 11.
Recently, a person in charge of a cement enterprise in Jiangsu and China Cement Network said that the current recovery of cement demand in Jiangsu is far less than expected, and the price of cement in Jiangsu continues to decline in order to maintain customers and compete for share.
"Demand expectations were better in January this year.". First, the epidemic has not affected production, transportation and engineering construction, which is the biggest change. Second, the projects that were delayed last year should be rushed this year, thus boosting some demand. Third, under the influence of the national economic stabilization policy, the investment in infrastructure will increase. But now it seems that the demand is still far from enough. The person in charge of the above enterprises said helplessly. The person in charge of the
enterprise said that under the original expectation, real estate could provide 1/3 of the cement demand. However, the development direction of real estate in Jiangsu is mainly high-end hardcover housing, with few ordinary commercial housing, and the vast majority of consumers can not afford high housing prices, resulting in weak purchasing capacity, so the recovery of the real estate industry is far less than expected.
At the same time, the investment of private capital in various projects has declined.
After three years of epidemic impact, most private enterprises have limited funds, and the current international situation is changing, international trade frictions, financial risks, policy changes may affect the investment decision-making and operation effect of private enterprises, deterred by risks, private enterprises do not have strong confidence in the market.
As for the construction of new countryside, the demand is not optimistic.
"Although there is some demand for new rural construction and the support of district and county governments is also very strong, the funds of local township governments are often delayed, resulting in the construction progress less than expected.". "The person in charge of the above enterprises said.".
At present, the demand for cement may only be driven by major national projects and key projects. However, the breadth and quantity of these projects are limited after all, and affected by rainy weather and insufficient funds, the current construction progress is relatively slow, so we can only hope to speed up the construction in the later period.
In addition to insufficient demand, the high cost is also an important factor restricting the cement industry in Jiangsu.
According to the "2022 Top 100 List of China's Cement Clinker Production Capacity" , the total clinker production capacity of Jiangsu Province in 2022 is 52.607 million tons , according to a senior person in the cement industry in Jiangsu Province. Jiangsu's cement production capacity has reached more than 100 million tons.
Data source: Cement Big Data (https://data.ccement.com/)
The cement market in Jiangsu is characterized by weak clinker production capacity and strong grinding capacity, and most enterprises need to purchase clinker. The high price of coal and limestone leads to the high price of clinker,
while the shrinking market demand and excess cement capacity make the price of cement in Jiangsu at a low level, and the upside-down price of clinker and cement has become the "pain" of many cement enterprises in Jiangsu.
"Enterprises with mines and kilns naturally do not have to worry about price upside-down, but most grinding enterprises can only support themselves even if they lose money in order to retain customers."
Industry veterans said that most of the enterprises with only grinding capacity currently use low-priced clinker purchased last year, but if the situation does not improve after the stock of clinker is emptied, perhaps these enterprises can only directly buy low-priced cement produced by other enterprises and resell it to customers in order to minimize losses. "Some enterprises have their own construction companies and engineering projects, which can relieve some of the pressure."
The above industry veterans said that in order to improve the current situation of the cement industry in Jiangsu and even the whole country, it is urgent to solve the problem of excess cement production capacity. He believes that the off-peak production of the current fire can not solve the overcapacity of the cement industry, the off-peak production can only temporarily adjust the imbalance between supply and demand in a single period of time, and when the market improves, the enterprises will produce at full capacity, which will lead to the loss of previous efforts and cure the symptoms but not the root causes.
"In order to alleviate the current problem of overcapacity, we must strictly implement the policy of capacity replacement, strictly prohibit the approval of small and large projects, phase out redundant and backward capacity and strictly punish violations." The industry veteran said.
As the current cement price is too low, Jiangsu cement enterprises generally have a strong willingness to raise prices, but as far as the current situation is concerned, the problem of tightening demand and oversupply has not yet been solved, and there is little room for Jiangsu cement price to recover.
The above industry veterans called on enterprises to maintain confidence in the market, the overall pattern of economic construction has not changed, and Jiangsu Province's economy is developed, major projects will not be few, future demand will certainly boost, we should work together to maintain cement prices.
"Cement is a product produced from non-renewable resources, which means that the quantity of cement is actually limited.". We consume a lot of resources in construction and production, but cement is sold so cheaply, which is a waste of precious resources and a waste of natural resources, which is what our whole industry needs to reflect on. The industry veteran said.
In order to further promote the green, digital and intelligent development of the cement industry, China Cement Network will be launched on April 24-25, 2023. The "China Cement Industry Green Development Summit Forum and Ultra-clean Emission Technology Exchange Conference" and the "Fourth China Cement Intelligent Summit Forum" were held in Changsha, Hunan Province, inviting industry experts, cement and related enterprises. Jointly promote the high-quality development of the cement industry! After the meeting, we will visit Sinoma Zhuzhou Cement Co., Ltd. and the first set of international "one-box SCR denitrification project of dust and nitrate".
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