The scale of land acquisition of top 100 real estate enterprises dropped by 10.2%, and the demand for cement will continue to be under pressure in the future.

the China Index Research Institute show that in the first half of this year, the total amount of land taken by TOP100 enterprises in China was 592 billion yuan, down 10.2% from the same period last year. This data shows a downward trend in the scale of land acquisition, but also reflects the cooling of the land market. According to statistics, in addition to the core city land auction to maintain a certain degree of heat, the land auction in most cities did not show signs of warming, the land market showed a trend of differentiation.

In the core urban land market, Beijing, Shanghai, Hangzhou, Hefei and other places have more than 50% of the land price cap transactions. This shows that the land market in these cities is still relatively active, attracting the participation of many real estate enterprises. The core areas of Guangzhou, Qingdao, Jinan, Suzhou, Tianjin, Fuzhou and other cities have also received higher enterprise participation, but the transaction price of non-core areas is lower, showing a clear differentiation phenomenon. Taking Suzhou as an example, 8 of the plots sold in the first half of this year reached the standard of reaching the top, the other 8 were sold at a premium, while the remaining 17 non-core and suburban plots were sold at the bottom price. This shows that the willingness of real estate enterprises to take non-core land is low, and the phenomenon of local state-owned enterprises underpinning still exists.

As more and more enterprises focus on land acquisition in core cities, the land market in first-tier and second-tier cities is expected to improve, and some real estate enterprises may moderately sink the focus of land acquisition to the suburbs of core cities or advantageous third-tier cities, which will have a certain impact on future cement demand.

First of all, with the decline of the total scale of land acquisition, the land reserve of real estate enterprises may be reduced. Land is the basis of real estate development, and the reduction of land acquisition may lead to the reduction of real estate projects, thereby reducing the demand for cement.

Secondly, the decline in the scale of land acquisition may also mean that the scale of real estate projects is reduced. Smaller scale real estate projects may require less cement, resulting in some compression of cement demand.

In addition, as real estate enterprises will focus on the suburbs of core cities or the third-tier cities, the number of real estate projects in these areas may increase, thus driving the demand for cement. However, the growth rate is relatively small, which can not fully compensate for the impact of the reduction of land acquisition in the first and second tier cities.

To sum up, the decline in the scale of land acquisition and the reduction in the scale of real estate projects may have a compression effect on cement demand, while the sinking of the focus of land acquisition by real estate enterprises may have a certain increase in cement demand in some core markets, but the growth rate is limited.