research and statistics of the People's Bank of China, according to the issuance plans announced by various places, the issuance scale of new local bonds in the third quarter was as high as 1966.9 billion yuan, an increase of 605.3 billion yuan over the same period last year. With the maturity scale of 1067.6 billion yuan of local bonds, it is estimated that the issuance scale of local bonds in the third quarter will be around 3 trillion yuan, an increase of about 300 billion yuan over the same period last year.
Recently, the State Council's Report on the Final Accounts of the Central Government in 2023, published on the website of the National People's Congress of China, also made it clear in the next step of financial work that we should speed up the use of additional treasury bond funds, local government special bond funds and investment within the central budget, enlarge the driving effect of government investment, and strive for early start and early results.
It is expected that the expansion of local debt issuance will be conducive to the steady progress of infrastructure investment. According to the data
of Minsheng Bank Research Institute, 68.4% of the new special bonds issued for project construction in January-June were invested in infrastructure, which was 2.4 percentage points lower than that in January-May, but 5.3 percentage points higher than that in the whole year of last year, and remained at a high level. Lin Xianping, Secretary-General of the Institute of Cultural Creativity of
Zhejiang University City College, believes that the acceleration of local bond issuance can provide more financial support for infrastructure construction, while some local governments have also increased their investment in infrastructure construction. This is of great significance to the steady growth in the third quarter. The accelerated growth of infrastructure investment can promote economic growth, increase employment opportunities, improve people's living standards, and lay a solid foundation for the next round of economic growth.
In recent years, affected by the downward trend of the real estate industry, the domestic demand for cement has declined significantly, and the importance of stabilizing the market situation has become increasingly prominent due to the pull of infrastructure on the demand for cement. However, in the first half of this year, the issuance of local bonds and infrastructure investment are not optimistic.
Open data show that in the first half of this year, a total of 1.8 trillion yuan of new local bonds were issued, only 39.5% of the new quota was completed. Among them, 1.5 trillion yuan of new special bonds were issued, and the issuance progress was 38.3%, which was significantly lower than the average of the same period in the past five years. In terms of
investment, data from the National Bureau of Statistics show that from January to May, the national fixed asset investment (excluding farmers) was 18800.6 billion yuan, an increase of 4.0% over the same period last year. After deducting the investment in real estate development, the national fixed asset investment increased by 8.6%, of which the infrastructure investment increased by 5.7% over the same period last year, and the growth rate decreased by 1.8 percentage points. The downward trend of the
real estate industry and the lack of infrastructure support exacerbated the downward pressure on cement market demand in the first half of the year.
Data show that from January to May, the national cement output was 687 million tons, down 9.8% from the same period last year, with an absolute decline of 10.91%. In terms of industry benefits, the cement industry lost about 6 billion yuan in the first quarter. Recently, the cement listed companies have announced half-year performance forecasts, most of them have fallen into substantial losses.
For example, Tianshan shares are expected to lose 2.9-3.5 billion yuan in the first half of the year, and Jidong Cement is expected to lose 740-870 million yuan in the first half of the year.
In the first half of the year, the cement industry has basically "closed the coffin", and the overall situation of the industry has declined seriously compared with 2023 (the industry earned 16.5 billion yuan in the first half of last year). With the expansion of
local debt and the acceleration of infrastructure investment, the demand for cement is good, so can the cement industry make a turnaround in the second half of the year?
