Recently, with the recovery of demand, large sand and gravel enterprises along the Yangtze River, such as Queshi Group, Minben Group, China Building Materials Group and Huaxin, have raised the ex-factory quotation of sand and gravel. But has the price of sand and gravel really risen as expected, and will the price fall in the short term? The author discusses from the following three aspects:
First, the price of large enterprises has risen, small enterprises have not followed up, and the overall market price has not seen a significant recovery
. According to the survey of the Cement Big Data Research Institute, the price of sand and gravel along the Yangtze River has been pushed up recently. The author has counted the price of sand and gravel of some large sand and gravel enterprises. In November, the price of machine-made sand and gravel in these enterprises did rise by 1-4 yuan/ton.
Table 1: Price information of sand and gravel of some large enterprises along the Yangtze River (yuan/ton)
Data source: Cement Big Data (https://data.ccement.com/)
Although the price of sand and gravel of large enterprises continued to rise, small enterprises failed to follow up and respond in time. As a result, the overall market price has not recovered significantly. Hubei Province is located in the middle reaches of the Yangtze River, with abundant sand and gravel resources, vertical and horizontal river network and convenient water transportation. It is an important supply base of sand and gravel raw materials in the middle and lower reaches of the Yangtze River. Hubei sandstone is a typical representative of sandstone in the Yangtze River Basin, and its price dynamics are quite representative. Taking Hubei as an example, according to the price data of construction sand and gravel released by the price monitoring center of Hubei Development and Reform Commission, the average price of machine-made sand and gravel at 17 monitoring points in the province has not shown a significant upward trend.
Figure 1: Price information of sand and gravel in Hubei Province (yuan/ton)
Data source: cement big data (https://data.ccement.com/). Hubei Development and Reform Commission Price Monitoring Center
II. Weak demand is the key factor
restricting the rise of sand and gravel prices. Weak demand is the core factor of the fatigue of sand and gravel prices. From January to October 2024, the national real estate development investment decreased by 10.3% compared with the same period last year, the real estate construction area decreased by 12.4%, the new construction area decreased by 22.6%, and the completed area also decreased by 23.9%. At the same time, fixed asset investment in highway and waterway transportation in the field of infrastructure construction also showed a downward trend, with a cumulative investment of 2.05 trillion yuan from January to September 2024, down 10.2% from the same period last year. With the shrinking market in these two areas, the demand for sand and gravel has fallen sharply. Cement Big Data Research Institute predicts that the demand for sand and gravel in China will be 13.502 billion tons in 2024, down 10.68% from the same period last year, which makes it difficult for the price of sand and gravel to recover in the short term.
Figure 2: Weak demand is the core factor
of the fatigue of sand and gravel price rise Data source: cement big data (https://data.ccement.com/)
III. Supply increases, and the contradiction between supply and demand intensifies. Prices are under further
pressure, and the supply of sand and gravel along the Yangtze River will continue to increase in 2024. According to the incomplete statistics of Cement Big Data Research Institute, from January to October 2024, the new production capacity of sand and gravel aggregates in China was 404 million tons per year, and the new production capacity along the Yangtze River was 89.9 million tons per year. With the successful operation of projects such as China Power Construction Hubei Sishui Changlai Green Mine, the competition pattern of sand and gravel market along the Yangtze River has become more intense. The continuous release of production capacity has aggravated the contradiction between supply and demand, resulting in further pressure on prices.
Table 2: New production capacity
of sand and gravel aggregates in the Yangtze River Basin in 2024 Source: Cement Big Data (https://data.ccement.com/)
In conclusion, the author believes that the price rise of sand and gravel in large enterprises is not sustainable. Prices of some enterprises have recovered in a short period of time, but in the long run, they are still in a downward cycle, demand is getting worse, production capacity is increasing, the contradiction between supply and demand is still intensifying, and the price of sand and gravel is not stable in the market competition.
