In the peak season of the cement market, which gradually warmed up in previous years, it is difficult to find a trace this year. According to the reporter, it is not only difficult to implement the early price increase, but also the price drop and market downturn in many places.
At the same time, the peak shifting production schedule of many provinces has become increasingly clear, which has been implemented in some areas, and some provinces have added weight to the original kiln shutdown plan again.
According to incomplete statistics, 14 provinces including Henan, Hebei, Shanxi, Shandong, Jiangxi, Fujian, Zhejiang, Jiangsu, Hunan, Guangdong, Guizhou, Yunnan, Sichuan and Shaanxi have introduced new peak shifting plans.
"The intensive introduction of peak shifting production plans in the cement industry is closely related to the current severe market situation." China cement network believes that since the beginning of this year, affected by the downward trend of the real estate industry, the multi-point spread of the epidemic and the lack of project funds, the cement demand has been poor since the second quarter, and the recovery of the cement market is less than expected.
According to the latest data released by the National Bureau of statistics on May 16, from January to April 2022, the national cement output was 58.106 million tons, a year-on-year decrease of 14.8%, an increase of 2.7 percentage points over the previous month. Among them, the monthly cement output in April was 19471 tons, a year-on-year decrease of 18.9%, and the monthly output in April fell below 200 million tons for the first time in nearly a decade.
multi provincial peak shifting production clear
According to China cement network, Henan Province is expected to shut down the kiln for 21 days from May 21 to June 10; Shanxi Jinzhong, northern, southern and southeastern areas stopped production for 30 days from June 1 to July 30, and Luliang area stopped production for 20 days from June 26 to July 15; Cement clinker enterprises in Hebei Province stopped production for 10 days from May 20 to June 10
Preliminary notice of Hebei cement clinker enterprises to carry out self-discipline peak shifting production in summer
At the same time, the production restriction time in some areas will be increased. For example, on the basis of the original plan of 15 days off peak for each new dry process clinker production line in Hunan Province from April 1 to May 31, Hunan increased the number of days off peak for 15 days in June, and extended the total number of days off peak for 30 days in the second quarter. Guizhou Province also issued a document earlier requiring that in the second quarter, on the basis of 40 days of off peak production shutdown for each production line, 10 days of off peak production shutdown time shall be added, and 40 days of off peak production shutdown for the second quarter.
Source: Official wechat of Guizhou Cement Industry Association
"Recently, affected by factors such as the rise of coal price and oil price, the production cost of cement has increased, but the downstream demand has recovered slowly, and the enterprise inventory has remained high." Guizhou Cement Industry Association said frankly in the above-mentioned documents why it added weight.
In fact, it has become a consensus in the industry that peak shifting and production restriction can alleviate the inventory pressure of enterprises to a certain extent, tighten the supply side, and then support the price. According to the market feedback, some manufacturers were forced to stop kilns due to high inventory before the notice of off peak kiln shutdown was issued in some areas.
Source: China cement network
For example, Tianfeng Securities Co.Ltd(601162) said in an earlier research report that in early May, affected by the continuous epidemic prevention and control and the intensified rainfall weather in some areas, the downstream demand decreased significantly month on month, and the shipment rate of enterprises in different regions decreased by 10% to 20%. In terms of price, due to the serious imbalance between supply and demand, the high price areas continue to fall. In order to improve the operation status, enterprises in low price areas carry out peak shifting production through industry self-discipline, and the supply shrinks, which once again drives up the price.
According to the analysis of China cement network, many places actively carry out peak shifting production to improve the business situation. On the one hand, in order to reduce inventory and costs, on the other hand, by increasing the regulation of the supply side, we can achieve the dynamic balance of supply and demand, increase sales volume and reduce price fluctuation, so as to provide a good foundation for the release of demand in the second half of the year.
cement market is expected to pick up
According to the market data center of China cement network, prices in many places in Northwest China fell last week (5.16-5.20), with a maximum drop of 30 yuan / ton; The price of cement in some markets in Yunnan Guizhou region in Southwest China decreased by about 30-50 yuan / ton; Cement prices in some parts of Northeast China may decline in the short term; The clinker price in East China Yangtze River Delta continues to be lowered by 50 yuan, and the cement price in some markets continues to be weak and downward; The demand of Hubei, Guangxi and Guangdong in central and southern China is weak, and the cement price in some markets is lower.
"May is the peak season of the cement industry, but the disturbing factors of the epidemic are still there. At the same time, the south is about to enter the rainy season, and the improvement of downstream demand is limited. It is expected that the cement output will still decline in May, but the decline range may be narrowed." For the future, Li Kunming of cement big data research institute said.
Other insiders said that there are more favorable factors in the later stage. For example, the relaxation of real estate regulation policies, the acceleration of the recovery of real estate sales, and the gradual implementation of infrastructure investment are expected to drive the steady increase of cement demand and provide support for the rise of cement prices. The cement market is expected to usher in a wave of recovery.
\u3000\u3000 "At present, the demand of the industry continues to recover, but the overall recovery pace is slow, which will strengthen the market expectation that the worse the demand, the more the policy needs to be further overweight". In addition, recently, the central bank and the national development and Reform Commission have continuously issued relevant measures to accelerate the development of "steady growth". Local governments have also continuously relaxed the real estate regulation policies to stabilize the operation of the real estate market. It is suggested to pay attention to the phase of infrastructure and real estate demand and high safety margin of valuation Off varieties. " Guosen Securities Co.Ltd(002736) means.
Tianfeng Securities Co.Ltd(601162) also said that the current policy environment is more favorable than that in 2021, and there is still room for subsequent rise. It is judged that the demand side of the whole year is still resilient.
A number of cement enterprises also expressed confidence in the future market. For example, Tangshan Jidong Cement Co.Ltd(000401) said in response to investors that due to the repeated and frequent epidemics, the company's comprehensive sales of cement and clinker decreased compared with the same period last year. However, at present, the basis of cement demand is still. In the short term, the demand is suppressed or delayed due to the impact of the epidemic. With the epidemic control in place, the cement demand will gradually increase.
Source: Shenzhen Stock Exchange Interactive Trading Co., Ltd
Anhui Conch Cement Company Limited(600585) said that it is expected that in the later stage, with the elimination of epidemic prevention and control, the implementation of peak shifting production and the centralized release of downstream demand, the industrial efficiency will also improve.
Source: SSE e interactive
Tapai cement said that the demand for cement is related to infrastructure, real estate and new rural construction. It is expected that the epidemic prevention and control, infrastructure investment and real estate investment will improve in the second half of the year. This year, the cement shipment will be low before high.
