sand and gravel aggregate has been reduced recently.
By the end of June 2024, the National Gravel Price Index (CSPI) closed at 81.41 points, down 1.19% annually and 4.77% year-on-year. The National Machine-made Sand Price Index (MSPI) closed at 84.10 points, down 1.31% annually and 7.56% year-on-year. When the
cement industry is in the doldrums, the aggregate business is regarded as a "life-saving straw" by many enterprises.
As Gao Dengbang, president of China Cement Association, pointed out in the "2024 Conference on High Quality Development of Cement Industry", "In 2023, the cement industry realized a profit of more than 30 billion yuan, but after deducting aggregates, many enterprises are losing money."
However, it is not a long-term solution to "decorate" the profits of the cement industry with aggregate income. On the
demand side, cement and aggregate are "grasshoppers on the same rope" , both of which are greatly affected by real estate and infrastructure. On
the supply side, in recent years, like the excessive expansion and overcapacity experienced by the cement industry, the national aggregate production capacity has increased substantially. Under the situation
of oversupply, the market competition is becoming more and more fierce, and the price of aggregate is gradually weakening. In
2023, the overall price of sand and gravel has shown a downward trend, and many enterprises have chosen to exchange price for quantity . Taking Huaxin Cement as an example, in 2023, the aggregate sales of Huaxin Cement increased by 66.58 million tons, an increase of 99.68% over the same period last year.
However, falling prices will also bring the same involution as the cement industry, resulting in profit compression and even losses.
According to the big data of China Cement Network, the gross profit margin of aggregate business has declined year after year in the past three years. The gross profit margin
of aggregate business of 11 listed companies in 2021-
2023 In order to really get out of the predicament, cement enterprises need to maintain the steady development of the main cement industry and seek a diversified sustainable development model in the long run.
