1. Overview
of the national and regional market (1) National market: weak demand, slightly lower prices
in August, the temperature began to decline, construction conditions have improved, but frequent typhoons and floods in some areas, the overall demand is weak; On the supply side, the demand peak season in September is expected to be strong, the mill operation rate will increase, and the supply will increase slightly. Overall, many regions began to push up, but demand has not yet recovered significantly, many enterprises continue to accumulate, the actual increase is more difficult, cement prices closed down slightly. At the beginning of August, the National Cement Price Index (CEMPI) was 110.29 points, closing at 109.02 points at the end of the month, down 1.33% annually and 25.2% year-on-year.
Regionally, supply still exceeds demand in the six regions as a whole. Specifically, there are more rainy days in the southwest region, and the market sales are insufficient; the construction of projects in the northeast region is insufficient, and the cement inventory has increased; the construction progress in the northwest region is not good in the mid-year off-season; the demand in East China is still weak, and the shipment of enterprises is low; the peak staggering is carried out in some parts of the central and southern regions, and the pressure of supply and demand has eased; the off-season in North China is stable, and the market has not changed much. Figure
1 and Figure 2: K-line Chart
of National Cement Price Index CEMPI and Cement Price Index (CEMPI) in August 2023 Data Source: Cement Big Data (https://data.ccement.com/)
Cost. At the end of August, the average spot price of 5500 kcal steam coal was 845 yuan/ton, down 1.17% annually and 31.02% year-on-year. From the demand side, the temperature was lower, coupled with the hydropower output, the coal consumption of power plants decreased; the supply side contracted due to the increased security inspection in the middle and late August, but the overall coal inventory was high, the coal market price first declined and then rose, and finally closed down slightly. At the end of the month, the cost of coal per ton of cement was about 82.73 yuan, down 0.98 yuan from the end of July, and the cost pressure eased. At the end of August, the cost price difference between cement and coal was 200.14 yuan/ton, down 1.4% from the previous month, and the price difference between cement and coal narrowed. In terms of
benefits, the average price of thermal coal in August was 828.7 yuan/ton, down 33.44 yuan/ton from the previous month, and the average cost was reduced by 3.3 yuan/ton, while the average price of cement in August was 332.7 yuan/ton, down 11.09 yuan/ton from the previous month, and the price of cement dropped even more. It is expected that the profit of the cement industry will continue to deteriorate in August.
Figure 3: Cement price, coal cost and price difference in August 2023 (yuan/ton)
Data source: cement big data (https://data.ccement.com/)
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