Local Enterprises: The "Fighting Intensity" of the Cement Market in Southern Henan Slows Down, but the Situation Is Still Severe

Last year, a serious price war broke out in the southern Henan market. Cement enterprises in the region fought fiercely, and the ex-factory price of cement once dropped to about 190 yuan/ton. As a result of the price war, the efficiency of local enterprises declined sharply, and many enterprises fell into serious losses. Cement price trend

in Nanyang since 2024, a local enterprise said that southern Henan had been the price highland of Henan before, and the market competition and cooperation relationship in the region was relatively stable. However, in 2023, due to the sudden change of market strategy of some cement enterprises, the original market structure changed, and the price war was once very fierce.

The above-mentioned enterprises said that under the background of price war, including "initiating enterprises", the performance of cement enterprises in southern Henan declined seriously last year, and many enterprises fell into losses. After

entering 2024, after the "fight" in 2023, the cement enterprises in southern Henan have gradually begun to realize that the price war is undoubtedly "killing one thousand enemies and losing eight hundred". The above-mentioned enterprises pointed out that "the intensity of the price war will slow down significantly this year, and everyone fought badly last year, but there was no winner.".

However, even so, the market in southern Henan has been facing great pressure. The main reason is the lack of demand, especially in real estate, the downward pressure is enormous. Taking Nanyang as an example, the data show that in 2023, the investment in real estate development in Nanyang decreased by 10.6% compared with the previous year, which is 1 percentage point higher than that in the whole country. In terms of infrastructure, although there are many major projects in progress, the demand pull is limited, and the government funds are not sufficient, which also limits the speed of infrastructure investment. Dragged down

by real estate and infrastructure, a local company said its sales fell by about 20% in the first quarter of this year.

In addition to the decline in sales, the inflow of cement from other provinces, especially Hubei cement , also has a great impact on the stability of the cement market in southern Henan. According to the above-mentioned cement enterprises, the peak-staggering production time in Hubei is 40-70 days, while the peak-staggering production time in Henan enterprises is generally more than 200 days throughout the year. The serious difference in peak-staggering production time makes it easy for Hubei cement to impact the market in southern Henan.

The above-mentioned enterprises believe that in general, the "fighting intensity" between local enterprises in the southern Henan market will slow down significantly in 2024, but the overall situation is still grim due to the decline in demand and the impact of cement from other provinces.