More than 2 trillion investment is on the stage! Cement demand on the way in 2023

In 2022, the cement industry ushered in a turning point of prosperity, and the output also hit a new low in the past 11 years.

Real estate investment is one of the main sources of cement demand, accounting for about 35% of the total demand, and in many areas, real estate accounts for half or more of the cement demand. In 2022, the downward trend of the real estate industry is the key factor leading to the decline in cement demand.

From the current situation, the short-term downward pressure of the real estate industry is still large. Even with the recent favorable policies, it is almost impossible for real estate to return to the previous state of high investment and high growth, and it is unrealistic to expect real estate recovery to reverse cement demand.

However, as another important factor driving cement demand, in the case of sluggish real estate investment, the pulling effect of infrastructure investment on cement is more promising. Especially in the near future, the field of infrastructure investment continues to benefit, looking forward to 2023, cement demand is expected to be substantially improved.

Data show that after the Central Economic Work Conference at the end of 2022, investment expansion has been taken as an important driving force to promote the overall improvement of economic operation, and accelerating the construction of major projects has become a "necessary option" for all regions to face the pressure of short-term stable economic growth. At the beginning of

the new year, many places set off a wave of major projects. According to incomplete statistics, as of January 5, 18 provinces, cities and counties (districts) across the country have held on-site promotion meetings or centralized commencement ceremonies for major projects in the first quarter, with a total investment of over 2 trillion yuan.

In the first batch of major projects to be launched this year, adding more infrastructure has become the same choice for all parts of the country.

For example, of the 423 major projects officially launched in Sichuan, 333 are policy-oriented development financial instruments, with a total investment of 638.09 billion yuan and a fund of 56.53 billion yuan. It includes 7 railway projects, 9 toll road projects, 37 agricultural and rural infrastructure projects and 46 affordable housing projects.

Infrastructure is the main source of cement demand. In 2023, with the release of the pulling effect of infrastructure construction, it is expected to play a positive role in boosting the domestic cement market.