In 2022, cement demand experienced an unprecedented decline, coupled with high costs, and industry profits nearly halved. As one of the core markets in the Yangtze River Delta, what is the situation in Jiangsu? Recently, China Cement Network has exchanged with some cement enterprises and industry associations in Jiangsu.
Overall, in 2022, due to the drag of real estate and the epidemic, the demand for cement in Jiangsu fell by about 15-20%, the average price per ton of cement fell by more than 100 yuan compared with last year, the profit was greatly reduced by cost embezzlement, and some enterprises maintained a break-even state.
In 2022, the profit of Jiangsu cement industry declined significantly
. According to the statistics Bureau, the cement output of Jiangsu in November 2022 was 12886 0.45 million tons, down about 10 million tons compared with the same period last year. Relevant leaders of several cement enterprises expect that the annual cement production will decline by about 20% year on year. As for the reasons for the decline in production, everyone mentioned the impact of real estate and the epidemic.
It is understood that Jiangsu has more than 10 million tons of cement flowing into Shanghai every year, accounting for 52% of Shanghai's cement input. Since the end of February and March 2022, due to the impact of the epidemic in Shanghai, Suzhou, Wuxi and other places, the operating rate of construction sites and mixing stations in Jiangsu and Shanghai is not high, the demand is sluggish, the competition is fierce, and many enterprises are seizing the market at low prices. Cement prices in Jiangsu have been falling sharply from March to July . In terms of
real estate, the construction area of real estate in Jiangsu from January to November 2022 was 61901 0.22 million square meters, a decrease of 51.0438 million square meters compared with the same period in 2021, a decrease of 7.6% compared with the same period in 2021; The new construction area was 92.6838 million square meters, a decrease of 60.6135 million square meters compared with the same period in 2021, a decrease of 39.5% compared with the same period last year. With the decline of
volume and price, the efficiency of the industry has also declined. "Suzhou cement production in 2021 is more than 13 million tons, less than 10 million tons in 2022, and the output is expected to decline by about 28%." A person from an industry association in Suzhou said that in terms of benefits, the price of clinker dropped in the fourth quarter , the cost was reduced and some grinding stations were profitable, but due to poor sales and more debts in the previous three quarters, many enterprises in Suzhou were in a state of break-even.
"In 2022, the demand for cement in our enterprises dropped by about 20%, the price of cement per ton dropped by 100 yuan compared with the same period last year, and the profit dropped sharply." A professional in Changzhou said helplessly.
"Affected by real estate and the epidemic, the demand of our enterprises has dropped by about 15%, and the price of cement has basically remained at the cost line.". With the increase of cost, the benefit of enterprises decreased by 4-5% year on year. A business person in Nantong spoke frankly. The market pressure in 2023 is more obvious
due to poor
demand and fierce competition. In the communication with many cement enterprises in Jiangsu, we learned that people are generally not optimistic about the cement market in Jiangsu in 2023, and some people expect that the demand in 2023 will drop by about 10% compared with the same period last year.
From the content of the exchange, there are many major projects in Jiangsu, such as high-speed rail and subway, but the real estate drag is serious, and the infrastructure projects are difficult to make up for the vacancy caused by the decline in real estate demand. Although there are many key projects, they all pay more attention to brand effect and use more cement products from large enterprises, which may have a greater impact on small cement enterprises in some places.
"The joy and sorrow of the market in 2023 depends on the repayment of mixing stations and traders before the Spring Festival of 2022. If the repayment is not satisfactory, it will directly affect the start of the market at the beginning of the year." An industry insider in Yancheng said that the demand for cement in 2023 was driven by the orders of existing mixing stations and traders in 2022, but at present, there are few orders for mixing stations in 2022. It is expected that at least in the first half of 2023, the demand for cement will be difficult to improve, and the demand for the whole year will fall by about 10% compared with the same period last year.
"Cement demand in 2023 is not only bad, but also the market pressure will further increase." Relevant person in charge of a large cement enterprise in Nanjing disclosed that at present, a leading domestic cement enterprise has set up many mixing stations in Nanjing, which are expected to open in 2023. At that time, a large number of foreign cement will come in through water transportation, and the competition in Nanjing cement market may become more intense.
Generally speaking, the downward trend of the real estate industry and the difficulty of capital repayment of downstream mixing stations have a greater impact on the Jiangsu market. In addition, Jiangsu's convenient water transport and serious external shocks have further increased the risk of market downturn.
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