Industry insiders: Henan cement industry should recognize the reality and rationally respond to market changes

2024-05-13 15:30:38

Even from the above four aspects, it is still difficult to fundamentally solve the problem of excess cement production capacity in Henan. If orderly competition and cooperation can not be achieved, the competition between "advanced production capacity and relatively advanced production capacity" will eventually change into the confrontation between "advanced production capacity and advanced production capacity".

According to China Cement Network, in order to enhance market confidence, Henan has promoted an increase of 50 yuan/ton in the price of high-standard cement and 30 yuan/ton in the price of low-standard cement since May 11. The implementation remains to be observed.

Local industry veterans said that since this year, Henan cement prices have been pushed up in many rounds, but it is always difficult to maintain. Before the current round of price push, Henan cement prices were running at a low ebb, coupled with high hidden costs such as environmental protection, resulting in serious losses and great operating pressure. According to the big data of

China Cement Network, from the beginning of March to the beginning of April, the price of cement in Henan had risen sharply, but the stability was not good, showing a step-like downward trend as a whole. By the beginning of May, the price of cement in Henan had dropped by about 60 yuan/ton compared with the beginning of the year. Henan cement price trend

since the

beginning of the year, the above industry insiders pointed out that if this wave of cement prices can not be implemented, "then in the first half of this year, Henan cement market will have no hope.". According to the data provided by

the above-mentioned industry insiders, the clinker output of Henan cement industry fell 16.9% in the first quarter of this year compared with the same period last year, although the decline slowed down compared with 2023. However, the inventory situation has increased significantly compared with last year, and the market situation is more severe than at the beginning of last year. Some cement enterprises in

southern and western Henan also pointed out that since this year, the market demand for civil construction in Henan has been bleak, a small number of real estate projects have been started, and the promotion of infrastructure projects has been slow, resulting in a serious decline in overall demand, with some enterprises'cement production falling by more than 30% in the first quarter.

The industry believes that Henan cement enterprises should recognize the reality of declining demand and abandon the business strategy of taking market share as the first priority.

"On the one hand, the decline in demand is certain, and irreversible, Henan cement industry has a serious overcapacity, even if half of the shutdown, the other half is still surplus;"; On the other hand, most of the regions are big lines, and the difference in competitiveness is not enough to eliminate rivals through price competition. The ultimate result of price war is that both sides lose and everyone has no food to eat. A cement enterprise in southern

Henan also said that after the leadership change of a large local cement enterprise last year, the market strategy turned to market competition. As a result, the price of cement in the southern Henan market, which was originally high or low in Henan, once fell below 200 yuan/ton. In the end, the enterprises in the region suffered serious losses.

The above industry insiders: "In the short term, off-peak production is still the key to stabilizing the industry situation", but the poor implementation of off-peak production in some private enterprises in Henan has further aggravated the grim situation of the market.

There are many ways to promote capacity removal, but ultimately there is still a need for orderly competition and cooperation

. Henan's excess capacity exceeds 50%, and capacity removal is the key to promoting the high-quality development of the industry. The above industry insiders also gave their own views

on how to reduce production capacity.

The 1、 eliminated some backward production capacity through strict environmental protection and energy consumption indicators. According to its introduction, Henan will require all cement enterprises to achieve ultra-low emissions this year. Kiln line enterprises without mine resources should be eliminated

2、. At present, about one third of the kiln line cement enterprises in Henan have no mine resources, and it is difficult for these enterprises to survive in the future.

The 3、 eliminated and shut down some social grinding stations with poor cement quality and prominent energy consumption and environmental protection problems. At present, there are nearly 150 social grinding stations in Henan, and the cement output of social grinding stations exceeded 20 million tons last year.

4、 promotes mergers and acquisitions among enterprises and shuts down some kiln lines.

However, even from the above four aspects, it is still difficult to fundamentally solve the problem of excess cement production capacity in Henan. If orderly competition and cooperation can not be achieved, the competition between "advanced production capacity and relatively advanced production capacity" will eventually change into the confrontation between "advanced production capacity and advanced production capacity".

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Correlation

On November 21, the Western Construction (002302) issued a prospectus for issuing stocks to specific targets in 2021. The company plans to introduce Conch Cement as a strategic investor through this issue, and Conch Cement will subscribe for 183 million shares, accounting for 12.48% of the total equity after the issue, becoming the second largest shareholder. The purpose of this issue is to optimize the capital structure, supplement liquidity and repay bank loans, which is expected to bring the company an annual increase of 8.85 billion yuan in operating income and a total profit of 708 million yuan, up 38.71% and 78.23% respectively from 2023.