1. Price Trend
According to the monitoring of SunSirs, the cement market fell first and then rose in 2019. The lowest point is in March. The average price in the monitoring area is 552.20 RMB/ ton at the beginning of the year. The lowest point is 456.20 RMB/ ton on March 19, and 548.20 RMB/ ton on December 23. From the lowest point in March to the highest point in December, the annual comprehensive increase is 20.17%.
2. Market Analysis
Products:
In 2019, the cement market fell first and then rose. Generally speaking, there are two waves of increase in the whole year. One is the spring rise from the end of March to May, with an increase of about 6%. The other rise is from the middle of August. In a short period of one and a half months after November in many regions, the increase has reached 6-10 rounds, with a single price adjustment range of 30-100 RMB/ ton. In the late period of many places in East China, the peak exceeded 500 RMB/ ton, and in some areas, the highest point exceeded 600 RMB/ ton.
From January to February, three provinces and one city in East China entered the winter break stage. During the Spring Festival, the construction site was shut down in a large area, and the demand declined significantly. In the middle and late March, the weather improved. The clinker price along the river rose ahead of the cement price. The clinker price in East China rose. The cement price in Zhejiang took the lead, with an increase of about 20 RMB/ ton.
In April, the market demand entered the peak season, and the national cement price began to continue to rise, up 2.07% month on month. The cement market demand in most parts of the country had basically recovered, and the market had officially entered the peak season, and the cement price had also increased. Since May, due to the influence of climate and gradually hot weather, cement as the construction raw material ushered in the summer off-season. The southern region represented by Yangtze River Delta and Guangdong, Guangdong and Guangxi were greatly affected by the rain, and the price rise and fall were slowing down. The rise and fall of Shandong were mutual, and the cement price was basically maintained between 450-520 RMB/ ton. The rise and fall of each region were different, and the market tends to be stable.
In June, affected by the rain weather, the construction market shut down broadly. The cement market ended the three-month peak season and turned into the off-season. The downstream demand for cement was limited, and the cement price fell. In July, the overall market situation of the whole country was weak. Affected by the rain weather and busy farming, the downstream cement demand continued to weaken, and the cement price in East China continued to decline. The cement inventory was at a high level, with only 60-80% of the enterprise's shipments.
Since August, the cement industry has entered a new round of peak staggering production period, including more than 1,000 cement enterprises in Jiangsu, Henan, Guizhou and other major cement production provinces have started to implement a new round of production suspension and production restriction plan, and the decrease of cement inventory is the main reason for the round of price rise. At the beginning of the peak season in September, the national market demand of the cement began to pick up, and the cement price rose significantly. Affected by environmental protection, peak shifting production everywhere, cement inventory is at a low level, sales are higher, and cement manufacturers increase prices to improve profits.
After entering November, the clinker inventory is low, and its price rise drives the cement price to rise. At present, the clinker and cement inventory situation are relatively ideal, the enterprise's rising power is sufficient, and the cement prices in various regions of the country are rising continuously. In November, cement prices in 11 provinces exceeded 500 RMB, such as Zhejiang, Jiangxi, Shandong, Hubei, etc. The lowest price is still in Inner Mongolia, but the absolute price has increased from less than 300 RMB last year to more than 300 RMB, and there was no cement price below 300 RMB. In December, the weather turned cold. Affected by environmental protection and production restriction, the cement and clinker prices in the Yangtze River Delta of East China rose sharply again, with the average price reaching 548 RMB/ ton, and even exceeding 600 RMB/ ton in some areas. Due to better market demand, prices in central and South China have also been raised at the same time.
Compared with last year, the growth in 2019 shows several characteristics: first, in 2019, the growth rate of infrastructure construction investment remains low and stable, and the growth rate of real estate investment is better than expected. The second is the enhancement of industrial chain coordination. In the second half of the year, the main reason for the skyrocketing growth in East China is that under the influence of environmental protection policies, the number of small and medium-sized manufacturers decreased, the concentration in the region increased, and several leading enterprises have strong pricing power over product prices. In addition, the demand level, such as the Yangtze River Delta and Dawan Area, has strong macro policy support. The demand in these areas is better when the supply is limited, which will form a phase of imbalance between supply and demand, leading to the rise of cement price.
Downstream: from January to November 2019, China's real estate development investment reached 12,126.5 billion RMB, up 10.2% year on year, 0.1 percentage point lower than that from January to October. Among them, the residential investment was 8,923.2 billion RMB, up 14.4%, and the growth rate dropped by 0.2 percentage points. From January to November, the housing construction area of real estate development enterprises was 8,748.14 million㎡, up 8.7% year on year, 0.3 percentage points lower than that from January to October.
3. Market Forecast
There are many infrastructure projects and little capital pressure. The cement demand will maintain the peak season level. In the first half of 2020, the demand is expected to be more optimistic. According to the prediction of SunSirs, the cement market will enter the winter market in the short term, the price will be gradually stable, and the Spring festival is coming, or there will be a certain degree of callback and decline. It is expected that the spring Market in 2020 will gradually open in early March.
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