According to the commodity market analysis system of SunSirs, cement in East China experienced a weak decline in March. The price of No.1 cement was 310.00 RMB/ton, while the price of No.25 cement was 304.00 RMB/ton, a decrease of 1.94%. The current price has dropped by 28.13% year-on-year.
In March, cement prices in some parts of East China fell. From the above chart, it can be seen that the cement market has been mainly fluctuating and declining in the past three months, with prices continuing to decline slightly this month. From January to February 2024, the cumulative cement production in China was 183 million tons, a year-on-year decrease of 1.6%. The decline was 0.9 percentage points larger than the entire year last year and 1 percentage point larger than the same period last year. The production was the second lowest level since 2010, only better than the same period in 2020. Although cement production has decreased, the rise in cement market is weak. In March, the resumption of work at construction sites in East China was slow, market demand was sluggish, and clinker inventories were at a medium to high level. Enterprises faced significant sales pressure, and in order to ship goods, manufacturers led the way in lowering prices, resulting in a weak cement market.
In March, the price of thermal coal was weak, and in terms of production areas, the overall supply of thermal coal was loose, with most coal mines maintaining normal production. As the weather gradually warms up, coal hauling vehicles in the market are relatively scarce, and prices continue to fall under pressure, showing the off-season effect. Overall, the supply of long-term coal is the main focus, and downstream terminal procurement enthusiasm is average, with most maintaining a cautious wait-and-see attitude. In terms of downstream ports, power plants tend to adopt a wait-and-see attitude and purchase according to demand. Overall, it is expected that the price of thermal coal will continue to fluctuate and operate. Weak coal prices cannot provide support for cement costs.
From January to February 2024, the national real estate development investment was about 1.18 trillion yuan, a year-on-year decrease of 9.0%, which is 0.6 percentage points narrower than that of January to December 2023; Among them, residential investment was 882.3 billion yuan, a decrease of 9.7%. From January to February, the construction area of real estate development enterprises reached 6.669 billion square meters, a year-on-year decrease of 11.0%; The newly constructed area of housing is 94.29 million square meters, a year-on-year decrease of 29.7%. Among them, the newly started residential construction area decreased by 30.6%. In recent years, real estate investment has shown a significant year-on-year decline, and infrastructure demand is difficult to hedge against the impact of the real estate downturn. The support for the cement market is weak.
At present, the demand in the East China market has recovered to 50-60%, but the inventory of clinker is still at a high level. With the end of staggered production, the situation of cement oversupply is difficult to improve. Therefore, cement product analysts from SunSirs believe that in the short term, the cement market will mainly experience a slight decline.
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