SunSirs: Cement Market in East China Fluctuates and Decreases in 2023

According to the commodity market analysis system of SunSirs, the cement market in East China in 2023 has fluctuated and declined. The price at the beginning of the year was 391.00 RMB/ton, and the price at the end of the year was 344.00 RMB/ton, a decrease of 12.02%. The lowest point was the quotation at 382.00 RMB/ton at the end of September 9th, and the highest point was 423.00 RMB/ton at the end of March. From the highest point to the lowest point, the annual comprehensive decline was 24.59%.

In 2023, the cement market has shown an overall downward trend. From the above chart, it can be seen that the cement market has experienced a significant decline for six months, with only February and March showing an increase. Among them, March saw the largest increase with a growth rate of 7.36%, while May and June saw the largest decline with a growth rate of 8.27% and 9.28%, respectively. The decline throughout the year was significant, with a relatively small increase. Compared to previous years, the autumn rally has been weak, and the market has continued to decline throughout the year.

From January to March, the cement market prices in most parts of East China first fell and then rose. In the early Spring Festival, due to the influence of cold air, some parts of East China experienced rainy and snowy weather, and the temperature continued to drop. As a result, the construction and construction site operating rates decreased. Recently, with the arrival of the Spring Festival travel rush, workers have started to return to their hometowns in advance. The demand for cement in the market is poor, and market competition is intensifying. Cement manufacturers are leading the market downward in order to sell goods. Starting from mid February in the later period, workers are gradually returning to work. Rainy weather is decreasing, construction sites are gradually resuming work, cement demand is increasing, inventory digestion is good, and driven by the rise in clinker, the cement market is starting to rise.

The cement market continued to decline from April to August, with a sluggish real estate industry and poor construction conditions on construction sites. Cement demand remained low and inventory continued to rise. In order to ship, many manufacturers in East China continuously lowered cement prices, and the overall cement market bottomed out. After August, due to the impact of rain and high temperatures, the cement market has shown weak upward momentum and continued to consolidate at a low level.

Entering the end of November, the implementation of staggered production stoppages was relatively good, with many enterprises shutting down their kilns and key projects supporting the foundation. The construction base rushed to work by the end of the year, and cement demand recovered compared to the previous period, leading to a rebound in the cement market.

Downstream: In 2023, the real estate market continues to cool down, and land auction groups are facing difficulties in providing strong support for the cement market. According to data from the National Bureau of Statistics, from January to November, the investment in real estate development in China was 10,404.5 billion RMB, a year-on-year decrease of 9.4%; Among them, residential investment was 7,885.2 billion RMB, a decrease of 9.0%. From January to November, the sales area of commercial housing was 1,005.09 million square meters, a year-on-year decrease of 8.0%, with residential sales area decreasing by 7.3%. The sluggish real estate market is the main reason for the poor demand for cement.

According to data from the National Bureau of Statistics, from January to November 2023, the national cement production was 1,867.35 million tons, a year-on-year decrease of 0.9%. From January to November 2022, the national cement production was 195.01 million tons, a decrease of 82.75 million tons in the entire range, a decrease of 4.24%.

Looking ahead to 2024, global economic growth is slowing down, and the situation in the construction industry is not optimistic. In the short term, as the weather turns cold and construction progress is affected, cement demand may not improve. Therefore, cement product analysts from SunSirs believe that the cement market will mainly experience a slight decline in the short term.

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