In 2022, the cement industry experienced a challenging year with a sharp decline in cement demand, poor performance of cement prices and high costs of coal.
Recently, the market feedback that the price of clinker along the Yangtze River in Anhui has opened a rising channel, bringing a positive attempt to enter the cement market in the Year of Rabbit. However, some insiders pointed out that whether the downstream market along the Yangtze River can recover depends not only on the local market, but also on the supply situation in the upper and middle reaches of Hubei and Chongqing. The Hubei market may become an important factor restricting the increase of clinker along the Yangtze River in this round. What is the current situation of the
Hubei market? What do local businesses think of 2023? In this regard, China Cement Network has exchanged with some cement enterprises in Hubei.
"The production line is currently under maintenance and is scheduled to open at the end of February." A cement enterprise in Ezhou, Hubei Province, said that in 2022, the situation of the enterprise was not good, sales fell by about 30%, production costs were high, and the basic balance of profits and losses was barely achieved.
"The demand for cement in Hubei is expected to decline by 2-3% in 2022 ." A large local cement enterprise in Wuhan reported that in 2022, the enterprise was in a state of loss and had a hard time.
According to the data of the National Bureau of Statistics, the cement output of Hubei in 2022 was about 110 million tons, down 6.92% from the same period last year. On the price side, the K-line chart of 42.5 bulk cement prices in Hubei P. O tracked by China Cement Network shows that since 2022, the price of cement in Hubei has been declining continuously.
In addition to the reasons for the decline in both volume and price, mining resources have also become an important factor in the profitability of local cement enterprises in Hubei. Many cement enterprises have pointed out to China Cement Network that because they do not have mine resources, the limestone they need needs to be purchased, which aggravates the pressure of production costs, and when the market is bleak, they are more vulnerable to market disturbances.
2023: Tighten the belt
Although China Cement Network learned from previous research that some cement enterprises in Hubei are still in "hot" production during the Chinese New Year this year, and the situation of kiln shutdown is not ideal, but the "hot" production corresponds to the flat demand.
"Tighten your belt, survive the first half and look at the second half." A cement enterprise in Wuhan said helplessly.
"2023 is not optimistic, mainly because real estate is not good, major projects need time to land, Hubei is in the market along the Yangtze River, which is greatly impacted by external shocks." A large cement enterprise in Hubei pointed out. A cement enterprise
in Ezhou is more pessimistic, "Prices are ultimately determined by supply and demand, demand is too weak, artificial control of supply, the gap between the two is too large, it is difficult." The person said that the market demand is weak, the competitiveness of enterprise cost control is poor, and the development is very passive.
Faced with the unoptimistic expectations in 2023, how should Hubei cement enterprises deal with it?
"Large enterprises need to have a big responsibility to do well, only when we work together to cope with the current decline in demand, it is possible to get out of the predicament." A local industry insider pointed out.
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