listed companies shrank, with revenue in North China falling the most
. In 2023, affected by the downturn of the real estate boom, the domestic cement industry as a whole faced the pressure of demand contraction, the market competition intensified significantly, and the market price retreated significantly. By the end of October, the National Cement Price Index (CEMPI) had dropped from 140.82 points at the beginning of the year to 109.58 points, with a cumulative decline of 22.18% in the year and a year-on-year decline of 29.15%.
Figure 1: In 2023, the national cement price index continued to decline (points)
Data source: cement big data (https://data.ccement.com/)
In the process of market price bottoming, Due to the different changes in downstream demand and market competition intensity in major regions of China, there are some differences in the actual cement market.
According to the financial data, the cement business revenue of the listed companies in the northeast region is generally close to the level of the same period last year; the cement revenue in the southwest and northwest regions decreased by about 9.01% and 10.61% respectively; the cement revenue in the central south and east China regions decreased by 13.35% and 15.57% respectively; Cement revenue in North China fell the most year-on-year, reaching 20.77%.
Figure 2: Revenue and year-on-year growth rate of cement business of listed companies in six regions in 2023 (100 million yuan,%)
Data source: cement big data (https://data.ccement.com/), due to the differences in regional division of different listed companies. Some of the data in this paper have repeated statistics.
Specifically, the Northeast region was affected by last year's epidemic, the growth base was low, and Liaoning Province implemented a comprehensive revitalization policy, and infrastructure investment was more active. Therefore, the cement sales of Jidong Cement, Shanshui Cement and Yatai Group in the Northeast market all achieved year-on-year growth, hedging the impact of falling cement prices, making the overall revenue basically the same as the same period last year. The recovery of demand in
North China was less than expected, and the impact of foreign cement was serious in some areas. The production capacity of local cement clinker production lines was low, and the volume and price of cement business of listed companies fell. The revenue of Jidong Cement and Tianshan Cement in North China fell by about 20%, which became the region with the largest decline in the overall revenue of listed companies.
East China and Central South China are the two regions with the largest consumption of cement in China, but due to the slowdown of real estate construction in many places during the year, the demand for cement in East China and Central South China is also less than expected. According to the big data research Institute of China Cement Network, cement production in central and southern China and East China decreased by about 11% and 4% respectively from January to September compared with the same period last year, which is higher than that in other regions in China. In this context, market share has become the primary goal of cement enterprises, East China and Central South China have entered a fully competitive state, prices have fallen below the average cost line, and the overall revenue reduction is higher than other regions. Even Conch Cement, which has an advantage in the competition, has seen its total revenue in East China and Central and South China fall by more than 8% compared with the same period last year. There was a significant difference in the internal demand between
the southwest and northwest regions. In Xinjiang, Qinghai, Xizang, southern Shaanxi and other regions, there was a significant increase in the construction of infrastructure projects during the year, the demand for cement was good, and the sales volume of listed companies in the relevant markets increased year-on-year. However, in Gansu, Guizhou and Shaanxi Guanzhong regions, due to the lack of new projects, cement sales have generally declined. Generally speaking, there are bright spots in the local demand of Northwest and Southwest China, coupled with the inconvenience of transportation in some regions, the impact of prices in other regions is relatively small, the decline of cement prices is relatively slow, and the decline of cement business revenue of listed companies is lower than that of other regions in China.
Table 1: Ranking of year-on-year changes in cement business revenue of listed companies (%)
Data source: Cement Big Data (https://data.ccement.com/)
Prices in Central South and East China dropped significantly.
By the end of October, the cement price index in Central South and East China had closed at 100.81 points and 108.44 points respectively, with a year-on-year decline of 35.97% and 29.54% respectively, leading other regions. Secondly, in North China and Southwest China, the cement price index fell by 29.03% and 26.03% respectively; in Northeast China and Northwest China, the price fell by 20.22% and 16.38% respectively.
Figure 3: Changes in the price index of cement in six major regions in China in 2023 (point)
Data source: cement big data (https://data.ccement.com/)
From the financial data of listed companies and the price index of regional cement, At present, the cement market in the western and northern provinces, which are strongly driven by infrastructure construction, is in relatively good condition during the year. At the same time, in the areas where the market is more fully marketized and the housing construction market used to be the dominant demand, market frictions have increased, and the competition among enterprises has become white-hot. Generally speaking, the current decline in cement prices shows a trend of stronger in the south than in the north and stronger in the east than in the west. The average transaction price of cement in
Central South and East China has dropped to a historical low, even falling below the base level in 2009. The intensity of market competition is significantly higher than that in other regions. The risk of price reduction has been basically released, and there is more room for rebound. However, the price trend depends on the recovery of demand, which is still not optimistic, and the follow-up may enter a longer grinding period. The cement market
in North China is not good, and the cement price index has fallen from a high level. However, due to the high concentration of local production capacity and strict environmental control, the absolute value of the price index is still in the second echelon. The withdrawal of cement price index in
Northwest, Northeast and Southwest China is relatively small, and its support mainly comes from the strength and sustainability of the policy. Under the background of continuous release of infrastructure projects, the change of cement price is relatively stable, but if there are difficulties in linking up the old and new projects, there is the possibility of further lowering the cement price.
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