In late December, China's cement prices continued to decline. According to the data provided by Tianfeng Securities Co.Ltd(601162) , the national cement market price last week was 548 yuan / ton, down 3.7 yuan / ton month on month. The price decline areas were mainly in Jiangsu, Shandong, Hunan, Guangdong, Chongqing and other places, with a decline range of 30-50 yuan / ton.
In contrast to the "falling" of cement prices, at present, the cement industry is setting off a new round of integration climax. Guo Dongmei, a senior analyst in the cement industry, told the 21st Century Business Herald that the improvement of the concentration of the cement industry also means the improvement of the voice and coordination ability of leading enterprises. From past experience, this will help alleviate the vicious competition and stabilize the cement price.
the voice of the leader has been greatly improved
The Anhui Conch Cement Company Limited(600585) with the second largest cement production capacity in the world has frequently acquired the equity of a number of high-quality listed and unlisted companies in the secondary market and within the group company since this year.
From July to October this year, Anhui Conch Cement Company Limited(600585) bought 162 million shares of Asia Pacific Group through centralized bidding transactions, accounting for 5% of the total share capital of the latter, constituting a show of cards. In addition, according to the third quarterly report of Anhui Conch Cement Company Limited(600585) , as of the end of the third quarter, Anhui Conch Cement Company Limited(600585) held Gansu Shangfeng Cement Co.Ltd(000672) 20265600 shares, with a shareholding ratio of 2.53%.
On August 30, Anhui Conch Cement Company Limited(600585) announced that 443 million yuan had purchased 100% equity of conch new energy company. Conch new energy company is mainly engaged in photovoltaic power generation and other businesses, providing power support for cement production and creating a new industrial growth pole.
On December 21, China West Construction Group Co.Ltd(002302) disclosed the fixed increase plan. As a war investor, Anhui Conch Cement Company Limited(600585) subscribed 1.76 billion yuan. After the issuance, it will hold China West Construction Group Co.Ltd(002302) 16.3% shares and become the second largest shareholder of the latter.
Industry insiders close to Anhui Conch Cement Company Limited(600585) told the 21st Century Business Herald that Anhui Conch Cement Company Limited(600585) has further extended and expanded the industrial chain by deepening and improving the industrial layout. Gansu Shangfeng Cement Co.Ltd(000672) and Jilin Yatai (Group) Co.Ltd(600881) are cement leaders in East China and Northeast China respectively. The cooperation with China West Construction Group Co.Ltd(002302) can complement Anhui Conch Cement Company Limited(600585) in the concrete industry. The acquisition of conch new energy helps the company promote the green and low-carbon strategy.
In addition to Anhui Conch Cement Company Limited(600585) , other industry leaders are also moving constantly. On December 11, the business of China building materials cement sector completed in-depth integration, and the new Tianshan cement with a market value of about 120 billion yuan appeared. After the integration, xintianshan cement has a clinker production capacity of about 300 million tons, a commercial concrete production capacity of about 400 million cubic meters and an aggregate production capacity of about 150 million tons. The market covers more than 20 provinces such as North China, central China and southwest China. It has become a cement company with the largest business scale, complete industrial chain and national layout.
From the development process of cement industry in Japan, France and other countries, when the cement industry enters the mature period, the industry concentration will increase and the competition pattern will tend to be stable. In China, the cement industry is one of the industries with serious overcapacity. In recent years, the state has controlled the industrial capacity by means of backward capacity withdrawal and replacement, enterprise merger and so on.
According to Sheng Changsheng, an analyst, from 2013 to 2018, with the support and encouragement of the competent authorities, major leading enterprises took the initiative to set off a round of merger and reorganization climax in China's cement industry. The proportion of the top ten leading clinker production capacity increased from less than 40% to more than 55%, which played an important role in stabilizing most regional markets and easing the price war, and the cement industry entered a new stage of development.
Under the more urgent dual carbon background, the cement industry has once again set off a wave of integration, and listed companies have become the leader of market integration, which has also been interpreted by the industry as in line with the development law of the industry.
Sheng Changsheng believes that in the long run, the existing capacity control intensity will continue. On the one hand, the new capacity will be strictly limited, on the other hand, the capacity replacement and the withdrawal of backward capacity will continue to increase, the cement capacity supply will be tightened, and the cement industry will gradually enter the stock market. Small and medium-sized enterprises are more affected because of their small capacity and poor technology. They are eliminated in capacity replacement. A considerable part of their excess capacity flows to leading enterprises, and the voice of industry leaders is greatly improved.
the prosperity of the industry will remain
Affected by the characteristics of short storage time, high product homogeneity and strong seasonality, the cement industry is a typical cyclical industry. Guo Dongmei introduced that in 2014, the demand of the cement industry peaked, the supply was surplus, and the cement price fell sharply. In 2017, under the effect of supply side reform and superimposing policies such as peak shifting production, the production capacity of the whole industry was accelerated, the industry concentration was improved, the cement price rose sharply, and the revenue and net profit of several cement listed companies also achieved double growth.
Reflected in the cement price index, Sheng Changsheng pointed out that since the end of 2017, the cement price index has basically remained between 140-160 points, and the prosperity of the industry is at a high level.
At present, in the context of double carbon, the cement industry is facing stricter capacity replacement policies and continuously tightened capacity indicators. The 21st Century Business Herald reporter found that recently, more than 20 regions such as Shandong, Henan and Hebei successively issued heavy pollution weather warnings and implemented corresponding industrial source emission reduction measures. Many cement enterprises are facing shutdown.
According to the data of China cement network, at present, except that the northern market is in the traditional winter off-season, the demand and shipment of eastern China, Central South, southwest and other Southern markets are generally lower than that in the same period of previous years. There are frequent air pollution warnings in Beijing, Tianjin and Hebei, and the overall demand is weak. The demand for shipments in Beijing remains at the level of 4-60%, and only 3-40% in Tianjin. The price of cement in some parts of East China continues to decrease by 30-40 yuan / ton, and the transaction price of some cement in central and southern Changzhutan and surrounding markets continues to decrease by 50-60 yuan / ton.
However, many people in the industry are still optimistic about the prosperity of the cement industry. Sheng Changsheng believes that the high-speed growth stage of real estate is expected to come to an end. Under the economic policy of stability, the demand for cement will enter a slow decline channel. Infrastructure construction is one of the focuses of economic work in 2022. With the issuance of large-scale local special bonds, it will form a new support for cement demand. Overall, the cement demand will remain stable at the current level in the medium and short term, and the prosperity of the cement industry will remain stable.
Tianfeng Securities Co.Ltd(601162) pointed out in a research report that the cement price may still be slightly adjusted in the next month, but it is unlikely to fall sharply. The price is expected to be a high starting point in the beginning of 2022. In the medium and long term, the demand side shows a slow downward trend, but the improvement on the supply side may be greater under the background of carbon emission reduction, and the profits of leading enterprises are still expected to grow.
"In addition to capital acquisition, the integration methods of the cement market will be more diverse." Guo Dongmei believes that the rationalization of market layout will be more conducive to the structural adjustment of the industry and the improvement of industry benefits.
(21st Century Business Herald)
