Zhu Xiaoyun: The Demand for Sand and Gravel in 2023 Is Steady, and the Price Center May Still Move Down Slightly

Recently, with the implementation of the new national standards of "Sand for Construction" and "Pebble and Gravel for Construction", and the introduction of mineral resources planning in various provinces and cities, how will the situation of the national sand and gravel industry develop in 2023?

along the Yangtze River and coastal areas are mainly falling, and the decline in the Yangtze River Basin is obvious. Following the epidemic in the first half of the year and the rainstorm and high temperature, the peak season in the second half of the year was delayed, and the price of sand and gravel in the Pearl River Delta weakened during the year. It was not until October that the demand for sand and gravel rebounded significantly. In the second half of the year, the price of sand in Jiangsu, Zhejiang, Shanghai and Anhui was generally lower than that in the same period in previous years. Hubei, Anhui, Chongqing in the Yangtze River Basin and Guangxi along the coast fell significantly, with Chongqing falling by nearly 30%.

Production capacity was released in piles, and central and southern China and East China were greatly impacted. According to statistics, from January to December, at least 73 aggregate production lines were put into operation in China, with an annual production capacity of more than 4. Among them, there are at least 15 production lines with an annual production capacity of more than 10 million tons, of which 8 are located in the central and southern regions, and the new production capacity of central and southern China, East China and Southwest China accounts for more than 90%. Hubei, Chongqing and Henan are the three provinces and cities with the largest new production capacity, with Hubei alone adding more than 100 million tons of new production capacity.

2. The average resource reserves of a single mining right have increased. Guangdong Becomes the Province

with the Largest Reserves

3. Looking forward to

the future of the sand and gravel industry, the new national standard for sand and gravel will be formally implemented, which will provide support for the high-quality development of the industry. The national standards of "Sand for Construction" (GB/T 14684-2022) and "Pebble and Gravel for Construction" (GB/T 14685-2022) were implemented on November 1, 2022, which put forward higher and more specific standards for enterprise production, which is conducive to promoting the quality of downstream concrete, and strengthening the standard linkage with downstream products. Ensuring the high-quality development of the industry will also help to promote the rational utilization of tailings, waste rocks and other resources.

According to the transfer of sand and gravel mining rights in 2022, the transfer of resource reserves and the production scale of mining rights in the central and southern regions are absolutely unique. It is expected that the central and southern regions will remain the most active area for sand and gravel aggregate projects in 2023, and the production capacity to be released in Guangdong, Hubei and other places will continue to accelerate growth.

Combined with the above situation, Zhu Xiaoyun put forward three suggestions:

1. The problem of overcapacity is becoming more and more serious. For the popular areas along the Yangtze River and coastal areas, enterprises should be more cautious in taking mines.

2. Prices have entered the downward range, and the era of high gross profit may be over, so more attention should be paid to cost-side control.

3. Although the demand for sand and gravel at the infrastructure end still maintains a strong momentum, many infrastructure projects use their own sand and gravel, which is difficult to boost the market. Sand and gravel production enterprises should calmly look at the recovery of sand and gravel demand.