SunSirs: Weak Consolidation of Cement Prices in East China

According to the commodity market analysis system of SunSirs, cement in East China has recently experienced a weak decline. The price at the beginning of the week was 302.00 RMB/ton, and the weekend price was 300.00 RMB/ton, a decrease of 0.66%, a month on month decrease of 2.60%, and the current price has dropped by 29.08% compared to last year.

Recently, cement in some areas of East China has been fluctuating and consolidating. In the past three months, the cement market has mainly fluctuated and fallen, with slight price fluctuations last week. The staggered production in the first quarter has ended, and some clinker in East China has opened kilns, leading to an increase in cement inventory. However, downstream market demand has recovered slowly, and cement manufacturers are under greater pressure to ship, resulting in a weak consolidation of the cement market.

Last week, coal prices fluctuated and consolidated. Most coal mines maintain normal production, and now the overall coal supply is basically stable. The purchasing demand for terminal power plants is average, and the market activity is not high, and the overall focus is on implementing long-term coal contracts. On the one hand, downstream ports are experiencing warming weather, and on the other hand, due to the impact of long-term coal replenishment on power plant inventories, they are maintaining a cautious wait-and-see attitude towards the market's coal supply. The overall market release is average, and the terminal market mainly maintains a small amount of rigid demand procurement for thermal coal. In the traditional off-season market context, overall transactions are relatively average.

From January to February 2024, the national real estate development investment was about 1.18 trillion RMB, 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 RMB, 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 gradually declined, and infrastructure demand is difficult to hedge against the impact of the real estate downturn. The support for the cement market is weak.

According to the forecast of SunSirs, the current cement inventory is high and market demand has not improved. 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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