China Cement Network surveyed the cement market in Yunnan, several cement companies said that the market demand in 2023 had shrunk by about 20% compared with 2022, mainly due to the downturn of the real estate industry and the slow progress of major projects. Cement prices are also much lower than the same period in previous years.
At present, the price of cement in Yunnan has roughly formed a pattern of high in the south and low in the north, high in the west and low in the east. How did this pattern come into being?
Yunnan cement industry insiders pointed out that the situation of Yunnan clinker production line is very common, and the actual production capacity of Yunnan cement clinker is about 35% higher than the approved production capacity, which is an important reason for the aggravation of the contradiction between supply and demand in Yunnan market and the downturn of the market. According to the list of China's top 100 cement clinker production capacity in
2023, the existing clinker production capacity in Yunnan Province is 94.302 million tons. According to rough calculation, the clinker production capacity in central Yunnan (Kunming, Qujing and Yuxi) alone is more than 40 million tons.
In the past few years, a large amount of cement demand brought by the booming real estate in central Yunnan once set off a boom in production line construction, but now the demand has declined, and the large amount of production capacity built in the early stage has undoubtedly become a huge burden on the industry. Supply and demand is the key factor to determine the price. Central Yunnan is the area with the most serious overcapacity and the most prominent contradiction between supply and demand in Yunnan, and its cement price is basically the bottom level in Yunnan.
In addition, because the limestone mines in the eastern and northern parts of Yunnan are relatively rich, and there are fewer limestone mines in the western and southern parts, the number of cement enterprises in the eastern and northern parts of Yunnan is far more than that in the western and southern parts. Therefore, the market competition in the east and north is more intense, which is also one of the reasons why the price of cement in Yunnan is high in the south and low in the north, high in the west and low in the east. The southwest of
Yunnan is ecologically fragile and environmentally complex, while the northwest of Yunnan is adjacent to Tibet. For the sake of environmental protection, the local construction of cement projects can be said to be extremely cautious. Therefore, the number of cement enterprises in the west and south of Yunnan is small, and the overall clinker production capacity is not high. Even in the context of declining demand, the contradiction between supply and demand is not too serious , so the cement prices in these two regions can be maintained at a slightly higher level. Northwest
Yunnan has a unique advantage in selling cement to Tibet because of its proximity to Tibet. A person in charge of a cement enterprise in Northwest Yunnan said that about half of the cement produced by the enterprise was sold to Tibet. Since this year, the price of cement in Tibet has been at the highest level in the country, which also provides support for the price of cement in Northwest Yunnan.
The southwest is located on the border, and the export of cement is very convenient. A local enterprise said that the company sold about 400000-500000 tons of cement to Myanmar in 2023, and the export was slightly hindered by the recent war in Myanmar. Although the company did not disclose too much, it conservatively estimated that the cement exported to Myanmar accounted for more than 30% of its cement output, based on the 310-day operation of the clinker production line and the clinker production capacity of the company. It can be seen that the demand for cement export is also an important guarantee for the local market.
Generally speaking, cement will flow from areas with low prices to areas with high prices. However, the terrain of Yunnan is special, the terrain in the west is much higher than that in the east, and the cement transportation in Yunnan is mainly by road, so it is difficult and costly for cement to flow from the east to the west.
And this year's overall market is poor, the price of cement in the western and southern parts of Yunnan does not exceed that in the eastern and northern parts too much, so in most cases, enterprises in the middle and low price areas of Yunnan are not worth the trouble of transporting cement to the west. This also consolidates the pattern of Yunnan cement price, which is high in the south and low in the north, high in the west and low in the east.
