China Cement Network Market Data Center news, the Year of the Rabbit has just begun, Guangxi cement prices opened the first rise in the New Year.
From January 29 to 30, some manufacturers in Nanning, Chongzuo, Baise, Yulin, Guigang, Guilin and other regions notified an increase in the price of bagged cement by 20 yuan per ton. According to
market sources, the current cost of cement production in Guangxi is still running at a high level, coupled with the extension of peak staggering production time and strong enforcement. The inventory pressure of enterprises in Guangxi is relatively small , which is an important factor driving up the price of cement in this round.
Several Guangxi cement enterprises and local professionals said that the implementation of this round of price increases is expected to be good. "During the Spring Festival, the shutdown of kilns in Guangxi was well implemented, which greatly improved the inventory pressure in the region, and it is expected that after the Lantern Festival, the market will further start," said the sales director of a large cement enterprise in Guangxi.
In addition, according to the survey of local enterprises by China Cement Network, the total time of off-peak production in Guangxi in 2023 is 130 days, including 50 days in the first quarter, 30 days in the second and third quarters, and 20 days in the fourth quarter. In contrast, in the peak staggering production plan of 2022, each line of cement kiln production enterprises in Guangxi region will be shut down for 120 days throughout the year. Since
last year, the domestic cement industry has been affected by the downward trend of real estate and the repeated impact of the epidemic, and the demand has fallen sharply. Statistics from the National Bureau of Statistics show that in 2022, the national cement output was 2.118 billion tons, down 10.8% from the same period last year, a new low in 11 years. Affected by this, the domestic cement market as a whole last year was "weak in the peak season and weaker in the off-season", and the national cement price index (CEMPI) at the end of the year fell by 40 points year-on-year.
Guangxi cement prices rose for the first time in the year, which is undoubtedly a positive attempt to boost the local cement industry, so how will the Guangxi cement market develop throughout the year?
Demand side: The impact of the epidemic has subsided, and the overall demand has increased
slightly. Like most regions in China, real estate is a key link in the demand for cement in Guangxi.
In 2022, the Guangxi market also suffered a strong impact from the real estate industry. According to the data of Guangxi Statistical Bureau, the investment in real estate development in the whole region dropped by 38.2% in 2022, 28.2 percentage points lower than national average, ranking second to last in the country, only better than Xizang. In terms of
cement price, affected by the decline in demand, the fierce market competition broke out in Guangxi cement market in 2022, and the ex-factory price dropped to about 180 yuan/ton. Cement prices fluctuated and declined throughout the year, with prices falling by more than 160 yuan/ton at the end of the year compared with the same period in 2021.
Guangxi P.O42.5 Bulk Cement Price Trend
in 2022 "In the new year, the demand for infrastructure will increase year-on-year, and the real estate market may still be difficult to boost, but with the dissipation of the impact of the epidemic, the civil market will improve slightly." Demand for the whole year is expected to be slightly upward , said a local cement company.
Recently, relevant news also shows that since 2023, all parts of Guangxi have carried out the "Early Spring Action" to attract investment in depth, actively providing high-quality and efficient services for investment projects, promoting the construction of a number of mature investment projects, and helping Guangxi achieve a good start in the first quarter of its economic work. In January
2023, Guangxi added 104 key investment projects outside the construction area, with a total investment of 52.829 billion yuan.
On January 30, the Party Committee and the government of Guangxi Zhuang Autonomous Region held a conference to promote the economic work of the whole region in the first quarter. The meeting pointed out that in order to achieve the expected target of 5.5% economic growth and 6.5% work target this year, Guangxi will focus on expanding effective demand, promoting high-quality development of the real economy, and stabilizing foreign trade and foreign investment.
This year, Guangxi will strengthen the guarantee of major project elements such as the Pinglu Canal, speed up the issuance and allocation of the first batch of new government bonds of 34.4 billion yuan, revitalize the stock of land not less than 2500 hectares, and strive to complete the investment of 100 billion yuan in major projects at the autonomous region level in the first quarter. We will implement assessment and incentives for attracting investment, vigorously undertake industrial transfer in the eastern region, and strive to complete more than 250 billion yuan of investment in the first quarter and more than 370 billion yuan of investment in new contracted projects. A person in the cement industry
in Guangxi said that the infrastructure and civil market will become the main support point for the demand for cement in Guangxi in 2023.
Supply-side: the release of new production capacity and the implementation of peak staggering affect the market situation
. According to the feedback from local cement enterprises, the demand for cement in Guangxi is expected to increase slightly in 2023, but there are still many unstable factors affecting the local cement market situation. In particular , the release of new production capacity may aggravate the problem of local cement overcapacity, thus threatening the market balance.
"Last year and this year, Guangxi will have more production capacity, and many of them are large lines, coupled with limited demand improvement, the problem of overcapacity may become more prominent ," local enterprises said.
According to the "Top 100 List of China's Cement Clinker Production Capacity in 2022" published by China Cement Network, the new clinker production capacity in Guangxi reached 11.873 million tons in 2022, ranking first in the country. The total production capacity of Hunan, Shandong, Jiangxi and Xizang is only 11.315 million tons. In 2023, another 3 million tons of clinker production capacity may be put into operation.
In recent years, a large number of production lines have been put into operation in Guangxi, mainly focusing on the huge market potential of Guangxi and the convenient water transportation of Xijiang River, which facilitates the radiation of the Pearl River Delta market. But now the local demand is not good, how to digest such a large production capacity is very critical. "A local enterprise said that in view of the obvious contradiction between supply and demand, whether the cement market in Guangxi will show a good development trend in 2023 depends on the implementation of off-peak production.".
Local professionals also pointed out that under the current industry situation, the cement industry needs to be more confident , jointly maintain the development trend of the industry, and try to avoid large fluctuations in the market situation.
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