SunSirs: Building Material, Cement Price Fell in February in East China

Price Trend

According to the monitoring of SunSirs, in February, affected by  COVID-19 and the extension of the Spring Festival holiday, factories in the first ten days were shut down, and the construction sites in the middle and last ten days were returning to work. The market demand recovered slowly, the cement market demand was still at a low level, and the cement price fell all the way. On February 1, the price of cement in East China was 540.20 RMB/ ton, and on February 27, it was 504.50 RMB/ ton, down 6.59%. The current price is 7.64% higher than last year.

Market Analysis

Products:

Since February, due to the impact of the epidemic of COVID-19, the cement factories have been shut down completely. After the middle and late ten days, the construction site has recovered slowly. The demand for cement has always been at a low level, and the cement price has continued to fall.

In Jiangsu Province, some construction sites and mixing plants began to return to work gradually, but the recovery of market demand was limited. On February 12, major enterprises in Nantong, Jiangsu Province, notified the cement price to be lowered, with a drop of 50 RMB/ ton. On February 17, major enterprises in Nanjing, Zhenjiang and other regions in Jiangsu Province notified the price of low-grade cement to be lowered, with a drop of 45 RMB/ ton. On February 26, major enterprises in Nanjing, Zhenjiang and other regions in Jiangsu province again notified the price of high-grade cement to be lowered, with a drop of 40 RMB/ ton.

In Zhejiang Province, most of the cement enterprises have resumed work, but the construction site has not been fully started yet, which is in a state of continuous resumption, with low market demand. On February 17, major enterprises in Hangzhou, Jiaxing, Ningbo and Zhoushan regions in Zhejiang Province notified the cement clinker price to be lowered, with a drop of 60 RMB/ ton.

In Anhui Province, the market demand is low. On February 11, major enterprises in Xuancheng region notified the cement price to be lowered, with a drop of 60 RMB/ ton. On February 18, major enterprises in Ma'anshan region notified the cement price to be lowered, with a drop of 45 RMB/ ton. On February 24, major enterprises in Tongling, Wuhu and other regions notified the price of low-grade cement to be lowered, with a drop of 20-45 RMB/ ton.

In Shandong Province, there is less market demand. Since February 10, major enterprises in Jining and other regions in Shandong Province have notified the cement price to be lowered, with a drop of 30-60 RMB/ ton.

In Fujian, affected by the epidemic situation, most of the construction sites and mixing plants were not started, and the sales was light. From February 24, major enterprises in Fujian notified the cement price to be lowered, with a drop of 20-30 RMB/ ton.

In Shanghai, affected by the epidemic situation and poor market demand, on February 11, major enterprises in Shanghai notified the cement price to be lowered, with a drop of 70 RMB/ ton.

In February, the price of cement market in most parts of East China fell. In the middle of February, cement enterprises returned to work one after another. However, due to the impact of the epidemic, the construction site and mixing plant started late, the demand for cement continued to be low, the actual transaction was light, and the prices of various manufacturers continued to be lowered.

Industry chain: upstream: with the gradual improvement of epidemic situation of COVID-19, the logistics and transportation industry has recovered, the supply of raw materials for coke enterprises has been supplemented to some extent, the limited production of enterprises has slightly eased, the supply of coke market is gradually recovering, the limited production of downstream steel plants continues, some enterprises just need to purchase coke, and the overall trade and investment of the industry is weak. At present, the domestic coke market is still stable. Downstream: from January to November 2019, China's real estate development investment reached 12,126.50 billion RMB, up 10.2% year on year, 0.1% lower than that from January to October 2019.

Market Forecast

According to the prediction of SunSirs, previously, the central and local governments have issued policies to actively promote the resumption of production and the commencement of major projects. The cement demand is expected to improve, but the early inventory needs to be digested. Therefore, the cement product analysts of SunSirs believe that in a short time, the cement market is mainly stable.

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