Xinjiang Cement Market Experienced "Roller Coaster" in the Second Quarter from Price Plunge to Surge

In August, many cement enterprises in Xinjiang notified the price recovery one after another, the price target pointed to the level at the beginning of the year, and the market sentiment was slightly boosted.

Local cement enterprises said that the price increase is a normal price, which is basically in place at present; as to whether it really returns to the price at the beginning of the year, it is "different regions, different situations".

Looking back on the process of this round of price fluctuations, the starting point is not in August. Since June, cement prices in southern Xinjiang have taken the lead in falling sharply, and then gradually spread to northern Xinjiang. Local cement enterprises said frankly that the direct cause of the price drop was the stall of demand. In the first half of the year, the demand for cement in Xinjiang region fell by about 20% year-on-year, which exceeded expectations. Under the contraction of demand, some enterprises started a price war to grab market share, and the price of individual enterprises dropped by more than 200 yuan/ton.

Continuous irrational low-price competition has not brought the expected market increment to enterprises, but has caused serious damage to the industry ecology. After a round of deep adjustment, local cement enterprises have gradually formed a consensus that the mode of low-price melee is unsustainable, and restoring market prices and standardizing industry order have become the common demands of the industry. For reference

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, the Xinjiang market area is relatively closed, the cement is limited by the transportation radius, and the external market impact is limited, which gives the conditions for "relatively good implementation" of the compound price. However, it should also be noted that the sustainability of the compound price ultimately depends on the real support of demand. Cement demand decline gap will not disappear because of a price recovery, the industry to really go out of the low point, still need the supply side and the demand side to stabilize simultaneously.

This round of price recovery is a lesson from the price war and a correction of the logic of "price for quantity". Putting it in place is only the first step, and how long it can be stable is the real test.