[Cement Market Overview] January: Market Demand Stagnant, Market Weak Operation!

1. Overview

of the national and regional market (1) National market: The market demand stagnated and the market was weak

. After January, most construction sites in the northern region were shut down for holidays, and most construction sites and mixing stations in the southern region were shut down one after another. During the Spring Festival, the market demand was in a stagnant stage. Overall, downstream demand continued to weaken in January, coupled with winter peak staggering in many places, supply and demand weakened synchronously, and cement prices fluctuated downward. The national cement price index (CEMPI) was 140.82 points at the beginning of January, and closed at 136.75 points at the end of the month, with a month-on-month decrease of 3.45%; due to the high absolute price in the same period, the cement price in this period decreased by 19.64% year-on-year.

From the regional perspective, the supply and demand relationship in the six regions as a whole continues to show a double weak trend. Specifically, the East China region has been shut down and the demand has declined significantly; the Southwest region has been shut down for holidays and the market sales have continued to decrease; the North China region has a low market demand in the off-season; the Northeast region has a winter break and a small number of enterprises have shipped goods; the Northwest region has a stagnant demand and a poor market transaction; the Central South region has been shut down and the market mentality is weak.

Figures 1 and 2: January 2023 National Cement Price Index CEMPI, Cement Price Index (CEMPI) K-line

Chart Data Source: Cement Big Data (https://data.ccement.com/)

Cost. At the end of January, the average spot price of 5500 kcal steam coal was 1231 yuan/ton, up 0.41% annually and 6.12% year-on-year. On the eve of the Spring Festival in January, the national temperature was low, the daily consumption of power plants rose at a low level, the industrial demand was still relatively low after the spring, the market was bearish, the price trend of thermal coal rose first and then declined, and the overall price rose slightly. At the end of the month, the cost of coal per ton of cement was about 120.52 yuan, up 0.49 yuan from the end of December, and the cost pressure increased slightly. At the end of December, the cost price difference between cement and coal was 234.32 yuan/ton, down 5.32% from the previous month, the price difference between cement and coal narrowed, the cost transfer ability of cement enterprises weakened, and the production efficiency deteriorated.

Figure 3: Cement price, coal cost and price difference in January 2023 (yuan/ton)

Data source: cement big data (https://data.ccement.com/)