the Spring Festival, the prices of cement and clinker in some areas increased sporadically, but the national market as a whole was relatively calm. What is the real situation at present and what will happen in the future? After
the Spring Festival, Guangxi, Fujian, Shandong, Guangdong and other regions have successively raised cement prices by 20-30 yuan/ton, which is still being implemented, and the effect of pushing up remains to be observed. About half a month after the end of the Spring Festival holiday in 2023, the market began to raise cement prices sporadically. Compared with the same period, this year's price increase period seems to come earlier. The author believes that the main reasons are as follows.
Table 1: Recent changes
in cement prices in some regions Source: Cement Big Data Research Institute
II. The implementation of peak staggering is better, and the inventory has declined
. During the Spring Festival, most regions have holidays and shutdown, and cement enterprises carry out peak staggering or maintenance shutdown. Supply declined, inventory remained relatively low, inventory pressure declined after the festival, enterprises had a strong willingness to raise prices, and some major cement provinces in East and South China began to raise cement prices sporadically.
Table 2: Peak
staggering in some major areas before and after the Spring Festival Source: Cement Big Data Research Institute
III. Coal price rises and cost pressure rises
. Coal is the biggest production cost of cement enterprises. Its price changes have a greater impact on the trend of cement prices. Due to the slow resumption of coal mines after the festival and the impact of large-scale rain and snow weather in the central and eastern regions on transportation, the supply has declined, the market demand has strengthened slightly under the wide cooling, the relationship between coal supply and demand has been mismatched in stages, the coal price has risen three times in a row after the festival, the coal cost of cement enterprises has increased, and the cement price has risen driven by cost pressure.
Figure 1: Coal price rises slightly after the festival (yuan/ton)
Data source: Cement Big Data (https://data.ccement.com/)
IV. The cement price is relatively low and the willingness to repair profits is strong
. In 2022-2023, affected by the deep adjustment of the real estate market, the market competition is fierce and the cement price fluctuates downward. At present, the national cement price index is 106.82 points, which is at a relatively low level in the past five years. Most cement enterprises suffer heavy losses. Therefore, the willingness to raise cement prices and repair profits after the festival is very strong.
Figure 2: Cement Price Index at a Relatively Low Position in Five Years (Point)
Data Source: Cement Big Data (https://data.ccement.com/)
V. Expected Slow Recovery of Demand The pressure in the first quarter should not be underestimated.
Although this year's market price increase period came earlier than before, the driving force of price increase is on the supply side. At present, most workers have not reworked, demand has not yet started, demand is still weak, and the foundation of price increase is not solid. According to the big data of China Cement Network, the construction index in the Pearl River Delta region is relatively high and the construction conditions are suitable, while the main areas in East China are still not suitable for construction. According to the data of China Meteorological Observatory, the rainy weather in the Yangtze River Delta region is in the majority before the end of February, while the temperature in the northern region is on the low side, and the market as a whole is difficult to improve. In March, as the temperature in the southern region warms up, demand is expected to take the lead in recovering, but the northern region is still lagging behind, coupled with the convening of the "two sessions" and the time needed for project deployment and capital landing, the market is expected to be under great pressure in the first quarter of this year.
Figure 3: Construction Index Trend of Major Provinces Since 2024 (%)
Data Source: Cement Big Data (https://data.ccement.com/)
