If the demand for cement at the infrastructure end can not play a supporting role, or even decline considerably, the price increase of cement driven by the cement supply side will become more and more difficult to implement.
On June 28, data from the Ministry of Transport showed that the total investment in fixed assets of highway and waterway transportation in China from January to May 2024 was 10265 154 million yuan, an increase of-9.3% over the same period last year, an increase of 1.5 percentage points over January to April.
Specifically, the investment in highway construction was 947.921 billion yuan, down 10.4% year on year, and the water transport construction was 78.632 billion yuan, up 7.2% year on year.
Data show that since this year, the growth rate of fixed assets investment in domestic highway and waterway transportation has accelerated to decline. Specifically, the growth rate was -4.7% in January-February, -5.5% in January-March, -7.8% in January-April and -9.3% in January-May.
Infrastructure investment has always been the key to driving domestic cement demand, especially after the downturn of the real estate industry in recent years and the sharp decline in cement demand at the real estate end, infrastructure is considered by the industry as the key to stabilizing the cement market.
However, from the actual situation, the growth rate of infrastructure investment is not ideal. The accelerated downward growth of fixed assets investment in highways and waterways will inevitably have a negative impact on the cement market demand.
Industry experts said that while the downturn of real estate led to the decline of related industries, land transfer income also declined significantly, which increased the burden of local debt in a disguised way, thus affecting the speed of infrastructure investment. On the
demand side, from January to May 2023, the national cement output was 771.41 million tons. According to the calculation of China Cement Network, the absolute value of this year decreased by 84.14 million tons, or 10.91%, compared with the same period last year. In terms of
price, since the beginning of this year, domestic cement prices have been running at a low level for a long time. From the end of May to the beginning of June, prices have been pushed up substantially in various places, but it is difficult to hide the reality of low demand. Recently, cement prices in the market along the Yangtze River have fallen again.
Overall, there is little hope that the demand for cement on the real estate side will recover, and infrastructure will remain the "biggest reliance" for cement demand for a long time to come. If the demand for cement at the infrastructure end can not play a supporting role, or even decline considerably, the price increase of cement driven by the cement supply side will become more and more difficult to implement.
