[Cement Market Overview] February: The pace of resumption of work accelerated, and prices rose slightly!

1. Overview

of the national and regional market (1) National market: The pace of resumption of work is accelerating, and the price rises

slightly. After February, the northern region is affected by the low temperature weather, most construction sites and mixing stations are still not fully resumed, the pace of construction is slow, and the temperature in the southern region is warmer. The recovery of market demand has been accelerated, and price increases in some areas are positive. Overall, the downstream demand gradually recovered in February, coupled with the winter peak staggering stage in many places, the supply-demand relationship strengthened, and the cement price fluctuated upward. The national cement price index (CEMPI) was 136.63 points at the beginning of February, and closed at 137.62 points at the end of the month, with a month-on-month increase of 0.64%; due to the high absolute price in the same period, the cement price in this period decreased by 18.13% year-on-year.

Regionally, the supply-demand relationship in the six regions is better than that before the festival, but the range is different. Specifically, the East China region has resumed work in succession, and the demand has been accelerated to recover; the downstream construction in the central and southern regions is active, and the enterprise shipment is good; the temperature in the North China region is low, and the overall demand is weak; the Northeast region has not yet started, and the market demand is sporadic; the Northwest region is mostly in the off-peak, and the market supply and demand is general; the Southwest region has started the project, and the market sales have increased.

Figures 1 and 2: February 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 February, the average spot price of 5500 kcal steam coal was 1240 yuan/ton, up 0.73% annually and 2.06% year-on-year. In the first and middle ten days of February, the downstream factories resumed work slowly, the purchasing demand was on the low side, and the price of origin was mainly reduced. After the middle and last ten days, the market sales increased. Combined with the impact of the Inner Mongolia mine disaster, the price of thermal coal turned from falling to rising, and finally rose slightly. At the end of the month, the cost of coal per ton of cement was about 121.40 yuan, up 0.88 yuan from the end of January, and the cost pressure increased slightly. At the end of February, the cost price difference between cement and coal was 235.69 yuan/ton, up 0.58% from the previous month, the price difference between cement and coal widened, the cost transfer ability of cement enterprises increased, and the production efficiency improved.

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

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