Cement prices plummeted several weeks before the industry profit or fell

Since the end of April and early May, the national cement market price has been gloomy for several weeks, making the overall industry profitability outlook not optimistic. The reporter learned yesterday that the average price of cement in China last week was 336.25 yuan per ton, which was lower than that of the previous month, a drop of 0.83%. It is reported that cement prices are mainly concentrated in the provinces of Beijing, Hebei and Anhui, with a drop of RMB 10-50/ton. In this regard, industry experts believe that the first quarter of the cement industry profits fell by 60% year-on-year, it is expected that the second quarter economic efficiency of the industry is not optimistic.

According to statistics, last week's cement prices in Beijing and Hebei continued to drop sharply, ranging from RMB 20-50/ton. The Beijing market has fallen by RMB 120/t since the price fell in early May. Currently, the competition among various companies is still fierce.

In Shijiazhuang, Hebei, Tangshan and surrounding areas, cement prices fell by 20 yuan/ton in the previous week, while clinker was also lowered by 20 yuan/ton. The lowest clinker ex-factory price in Shijiazhuang reached 210 yuan/ton, and the clinker in Tangshan District 260 RMB/ton. Some individual companies have begun to suspend production due to full storage. It is estimated that most of the production lines in Hebei province will stop production due to full inventory in June.

“As affected by the release of new production capacity and continued decline in cement prices in surrounding areas, the prices of cement in Shanghai and Hefei have once again dropped slightly. Now the high price of Shanghai and Hefei are all at around RMB 300/t,” said one industry source. After mid-to-late, the industry will enter a relatively slack season, and the market will face certain pressure. In the short term, the fundamentals of the industry will remain weak.

Insiders pointed out that the profits of the cement industry fell by 60% year-on-year in the first quarter. Although the second-quarter data has not yet been released, the industry's most profitable Conch Cement (600585, stocks) recently announced that the company's net profit will be the same The drop of 50% indicates that the economic benefits of the industry in the second quarter are also not optimistic.

“We recently visited Southern Cement and learned about the current profitability and capacity of cement companies in East China. At present, overall, the cement demand in the Pan-Yangtze River Basin has not shown much improvement,” said Hongliang Securities analyst Hong Liang. .

He told reporters that although the cement kiln operation rate of large-scale cement companies (such as Conch Chaodong) in Anhui Province has basically reached more than 90%, the operating rate of some cement companies like Zhejiang and Jiangsu is still low, Zhejiang’s Some small cement companies have already experienced the phenomenon of full storage. The profitability is not optimistic.

However, at the same time, he believes that although the cement price “has been falling,” it may have improved in the fourth quarter.

"As interest rates are lowered and several adjustments are made, the overall monetary policy in the second half of the year is expected to remain loose. This will provide financial support for some projects that are newly started or under construction, and will also increase the investment momentum for infrastructure projects or real estate projects. This will drive the potential demand for cement," said Hong Liang.