P.O42.5 Cement Approaching 200 yuan/ton, Henan Market Faces Great Pressure

China cement network market data center news, recently, Henan market abnormal weather, high temperature and rain and other adverse factors led to low market demand, cement enterprise shipments dropped to about 5-6%, inventory continued to remain high. Cement prices in Zhengzhou, Xinxiang, Jiaozuo and other places in northern Henan continued to decline, with a decline of about 10-20 yuan/ton.

Local enterprises said that at present, the price of P.O42.5 bulk cement in northern Henan and Zhengzhou has dropped to about 205 yuan/ton, while the cost of enterprises has reached 220 yuan/ton, and enterprises are basically selling at a loss. Henan cement industry will face a large area of losses. There are many reasons for

this dilemma.

Firstly, Henan cement market relies heavily on the real estate industry on the demand side. For example, in the core market of Zhengzhou, the cement demand brought by the real estate industry accounts for more than 50% of the total cement demand. Since last year, the real estate industry has been in a downturn, which has had a serious impact on local cement demand.

Secondly, in recent years, the scale of production capacity has increased, aggravating the contradiction between supply and demand in the market. According to local sources, in recent years, there has been a wave of technological upgrading and transformation, and enterprises have continuously increased their efforts to increase production and transformation, resulting in a substantial increase in the actual production capacity of Henan cement, and the problem of overcapacity is extremely serious.

In addition, Henan cement production capacity concentration is low, the market structure is chaotic, the "first echelon" enterprises have insufficient market voice, and the "second echelon" cement enterprises have strong strength, which further aggravates the instability of the market under the situation of declining demand.

Local enterprises said that from the current situation, it is almost impossible for the demand of the real estate industry to rebound substantially in the future. It is difficult to make up for the hole caused by the decline of cement demand in the real estate industry only by infrastructure investment. The challenge of Henan cement market in the second half of the year is still enormous.