rise! rise! rise! Inventory has dropped sharply, queuing up for shipping doubled! It made 76.7 billion yuan in half a year. Why is this market suddenly "hot"?
Since the beginning of this year, affected by the epidemic and the super rainy season in the south, the cement market was once in a situation of low demand and falling prices.
But entering August, as the rainy season is coming to an end, the demand for cement across the country has begun to pick up, and sales have increased significantly. The transportation terminals of some cement companies and the ships that pull cement and clinker have also begun to line up.
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Demand picks up and sales increase
Cement inventory has dropped sharply
In a wharf dedicated to transporting cement clinker in Huzhou, Zhejiang, dozens of transport ships are parked, they are waiting in line to load cement clinker. According to the staff of the wharf, 80 such ships can be shipped every day. Months doubled.
Pan Liwei, deputy general manager of production of Zhejiang Huzhou South Logistics Co., Ltd.: We shipped 800,000 tons in one month last month, and now it has reached 900,000 tons in 18 days, and the daily shipping volume is between 55,000 and 60,000 tons. It is about 30,000 tons per day more than before. According to reports, due to the impact of the epidemic this year and the superposition of factors in the rainy season in the south, cement demand has been suppressed, and cement companies have accumulated serious product inventories. After entering August, with the gradual recovery of downstream demand, sales of many cement companies have increased significantly, and cement inventories have gradually been digested.
Zhang Bo, deputy director of the cement branch of Wuhu Conch Cement Co., Ltd.: The current cement inventory is 45%, and the clinker inventory is about 55%, which is much lower than the previous period, by more than 20%.
According to data from the China Cement Association, as of August 21, the national cement inventory has fallen to 60.8%, the Yangtze River Delta region has fallen to about 50-55%, and some areas in Zhejiang have fallen below 50%. Industry insiders believe that as the impact of continuous rain weather weakens, the suppression of early-stage demand will bring about a concentrated release of late-stage rush work demand.
Kong Xiangzhong, executive chairman of the China Cement Association: This year, new infrastructure construction is launched, and traditional infrastructure construction is also advancing at the same time. All infrastructure construction is inseparable from cement. From this perspective, the market in the last few months of the second half of the year will have a better situation in which both volume and price rise.
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Raise prices multiple times within half a month
Cement prices generally rise
The rebound in cement demand has also boosted market confidence. Cement companies have accelerated their production. At the same time, cement companies have also issued price increases, and cement prices have generally risen across the country. △ CCTV Finance's "Punctual Finance" column video is at a concrete mixing plant in Chizhou, Anhui. Several concrete mixer trucks are loading concrete and are ready to be transported to nearby construction sites. The person in charge here told reporters that since August, the downstream construction sites have gradually resumed , Their concrete sales began to increase rapidly, and as the main raw material for the production of concrete, the price of cement also rose.
It is understood that in July this year, with the arrival of the rainy season in southern China, the price of cement fell to the lowest level in the past two years. In the Yangtze River Delta region, the average market price of 42.5 bulk cement fell to 425 yuan/ton. In the same period last year, it fell by 44 yuan/ton, and since August, companies have begun to increase cement prices.
Zhu Lisheng, vice president of Southern Cement Co., Ltd.: The price increase of cement was slightly earlier than in previous years, and the price increase of cement in previous years was generally in late August. Since the beginning of August this year, there have been one or two rounds of price increases in the Yangtze River Delta, with an average price increase of 20 to 30 yuan per ton. This year, due to the relatively large price drop in the early period, after the manufacturers shut down the kilns, the supply decreased periodically, which led to the rise of cement prices this year about a week earlier. In the past two weeks, cement prices in Jiangsu, Zhejiang, Shanghai, Anhui and other places have risen. At present, in the Yangtze River Delta, the average market price of 42.5 bulk cement is 453 yuan/ton, an increase of 33 yuan/ton from the July low. 3
The effect of industrial upgrading is obvious
Cement stocks are active
With increasing sales and prices, the peak season for the cement industry is approaching. In fact, some cement companies have achieved certain results in capacity optimization and industrial upgrading in recent years, and related stocks in the cement sector have also been very active.
In the factory of a cement company located in Wuhu, Anhui, there is no truck to pull cement. The person in charge said that in order to improve efficiency and reduce costs, a belt transportation corridor was built a few years ago and transported by closed belts. The cement can be transported directly from the factory to the ship at the dock. At the same time, the company has also completed intelligent construction in production and management.
With the elimination of backward production capacity and intelligent construction, the competitiveness of cement companies has gradually increased in recent years. According to data from the Ministry of Industry and Information Technology, the national cement industry achieved a profit of 76.7 billion yuan in the first half of 2020. Although it has declined year-on-year, the total industry profit is still the second highest in the same period in history, second only to 2019. Since the beginning of this year, the cement sector-related stocks have also maintained a volatility and climbing pattern. As of the close of last Friday, the cement sector rose by nearly 27%, outperforming the Shanghai Composite Index by 17 percentage points over the same period. In terms of specific stocks, Tianshan, Qilianshan, Shangfeng Cement, and Ningxia Building Materials have all increased by more than 50% this year.
Sun Mingxin, chief analyst of the building materials industry of CITIC Securities: We believe that the stability of the profitability of cement companies will continue in the future. In the second half of this year, there may be some unexpected surprises on the demand side, including infrastructure investment and old community renovation.