The situation of increasing income without increasing profit in the cement industry will continue in the first quarter of 2022. Jiang Yuanlin, an industry analyst of Centennial construction network, told the financial associated press that the main reason why cement enterprises increase income but not profit is that the production cost increases significantly, but the sales volume has fallen sharply after the price increase, and cement enterprises do have difficulties.
Recently, the 2021 annual report released by a number of listed enterprises in the cement industry shows that the net profit of cement enterprises generally declined in the case of cement price rise last year. According to the data of the Ministry of industry and information technology, the revenue of the national cement industry in 2021 was 1.08 trillion yuan, a year-on-year increase of 7.3%; The total profit was 169.4 billion yuan, a year-on-year decrease of 10%.
This situation of increasing income without increasing profit will continue in the first quarter of 2022. Wind data shows that the net profit attributable to the parent company of four cement listed companies, including Gansu Qilianshan Cement Group Co.Ltd(600720) ( Gansu Qilianshan Cement Group Co.Ltd(600720) . SH) and Xinjiang Tianshan Cement Co.Ltd(000877) ( Xinjiang Tianshan Cement Co.Ltd(000877) . SZ), which have disclosed the performance forecast of the first quarter, has decreased significantly year-on-year.
Since April, cement has been “rising” all over China. According to the data of Centennial construction network, as of April 17, East China rose by 20 yuan / ton; South China rose 25-30 yuan / ton; Hebei rose 30-40 yuan / ton; On April 16, the cement price in Guiyang directly increased by 70-100 yuan / ton, which attracted the attention of the industry.
Jiang Yuanlin, an industry analyst of Centennial construction network, told the financial associated press that the sharp rise in prices in Guizhou was mainly due to the strict implementation of the staggered peak kiln shutdown plan by various cement manufacturers in Guizhou in the first and second quarters, the implementation of various enterprises was in place, the implementation was good, the market supply was limited, and the enterprise inventory was low. In addition, Guizhou is less affected by the epidemic, the construction sites have resumed one after another, and the demand is gradually rising, driving up prices.
From the comprehensive situation of all regions in the country, the current demand for cement downstream is not booming, and it is also a fact that the inventory is high. According to the data of digital cement network, the national cement delivery rate last week was 62.7%, down 24.5 percentage points year-on-year; The storage capacity ratio was 67.2%, which was basically the same as last week and the highest in the same period in recent years.
A relevant person from a cement enterprise told the financial associated press that affected by the policies of prohibiting new production capacity, staggering shutdown, dual control of energy consumption and withdrawal of backward production capacity, the national cement output has declined steadily this year. Since the first quarter of this year, cement enterprises have raised prices continuously because they can’t bear the pressure of rising costs, and the market sales industry is relatively depressed. At present, the state strictly controls the price of coal. For cement enterprises, they need to grab goods from power enterprises and other guarantee and supply units, and the rising cost makes many cement enterprises “unbearable”. After the price rise, the sales volume of cement in China fell by nearly 20% year-on-year in the first quarter, affecting the profits of cement enterprises.
According to the financial Associated Press reporter, the average price of thermal coal in China has fallen from the highest 1775 yuan / ton in early March to 1120 yuan / ton. Although there are regional differences, the cost of the cement industry has gradually decreased since April.
Jiang Yuanlin told the financial associated press that cement, as an important bulk product, has a great impact on the downstream construction industry and the national economy. At present, when the cost increases, cement related enterprises mostly choose to raise prices to ensure profits, but the profits decline due to sluggish sales. If the cement industry can maintain price stability and increase the supply to the market, it may be of greater help to the profits of cement enterprises and the overall Chinese economy.
